EmailEconomic
Last Update: 30-Apr-13 08:50 ET
Employment Cost Index
Highlights
- The Employment Cost Index increased 0.3% in Q1 2013, down from a downwardly revised 0.4% (from 0.5%) in Q4 2012. The Briefing.com consensus expected employment costs to increase 0.5%.
Key Factors
- Total wages and salaries growth improved, increasing 0.5% in the first quarter after increasing 0.3% in Q4 2012.
- Total benefits spending slowed and increased only 0.1% after increasing 0.6% in Q4 2012.
- Private compensation decelerated and increased 0.3% in Q1 2013 after increasing 0.4% in the previous quarter. Private wages and salaries growth strengthened to 0.5% from 0.3% while benefits spending declined 0.3% after increasing 0.6% in Q4.
- The BLS discovered an error in its benefits calculations. Therefore, the unexpected contraction in private benefits may be the result of the error and not from an actual decline in benefits. More will be known when the data are revised next quarter.
- Public compensation growth remained at 0.5% for a second consecutive quarter. Public wages and salaries spending slowed, increasing 0.2% after rising 0.3% in Q4 2012. At the same time, benefits spending accelerated and increased 1.1%, up from a 0.7% gain in Q4 2012.
Big Picture
- Employment costs are the major component of business costs. The trend in these data therefore have important implications for cost-push inflationary pressures and for profit margins. In recent quarters, the trend has been relatively steady to lower. Weak overall demand in the economy should keep the ECI cost index on the current trend.
| Category | Q1 | Q4 | Q3 | Q2 | Q1 |
|---|---|---|---|---|---|
| Quarterly Changes | |||||
| Total ECI | 0.3% | 0.4% | 0.5% | 0.5% | 0.5% |
| Wages and Salaries | 0.5% | 0.3% | 0.3% | 0.4% | 0.5% |
| Benefits | 0.1% | 0.6% | 0.6% | 0.7% | 0.6% |
| Year/Year Changes | |||||
| Total ECI | 1.8% | 1.9% | 2.0% | 1.7% | 1.9% |
| Wages and Salaries | 1.6% | 1.7% | 1.7% | 1.7% | 1.7% |
| Benefits | 1.9% | 2.5% | 2.6% | 2.1% | 2.7% |
