Updated: 31-Jul-26 09:19 ET
Highlights
- The Q2 Employment Cost Index increased 0.9% (Briefing.com consensus: 0.8%) on the heels of a 0.9% increase in Q1, with wages and salaries up 0.9% and benefit costs up 1.0%.
- Compensation costs for civilian workers rose 3.4% for the 12-month period ending in June 2026 versus 3.6% for the 12-month period ending in June 2025. Wages and salaries increased 3.2% for the 12-month period ending in June 2026 versus 3.6% for the 12-month period ending in June 2025. Benefit costs increased 3.8% for the 12-month period ending in June 2026 versus 3.5% for the 12-month period ending in June 2025.
- Compensation costs for private industry workers rose 3.3% for the 12-month period ending in June 2026 versus 3.5% for the 12-month period ending in June 2025. Wages and salaries increased 3.1% for the 12-month period ending in June 2026 versus 3.5% for the 12-month period ending in June 2025. Benefit costs increased 3.8% for the 12-month period ending in June 2026 versus 3.4% for the 12-month period ending in June 2025.
- Compensation costs for state and local government workers rose 3.6% for the 12-month period ending in June 2026 versus 4.0% for the 12-month period ending in June 2025. Wages and salaries increased 3.4% for the 12-month period ending in June 2026 versus 3.9% for the 12-month period ending in June 2025. Benefit costs increased 4.0% for the 12-month period ending in June 2026 versus 4.1% for the 12-month period ending in June 2025.
- The key takeaway from the report is that wages and salaries for civilian workers, up 3.2% year-over-year, are not keeping up with inflation. That could eventually lead to reduced discretionary spending activity.
| Category | Q2 | Q1 | Q4 | Q3 | Q2 |
| Quarterly Changes | |||||
| Total ECI | 0.9% | 0.9% | 0.7% | 0.8% | 0.9% |
| Wages and Salaries | 0.9% | 0.8% | 0.7% | 0.8% | 1.0% |
| Benefits | 1.0% | 1.2% | 0.8% | 0.8% | 0.7% |
| Year/Year Changes | |||||
| Total ECI | 3.4% | 3.4% | 3.4% | 3.5% | 3.6% |
| Wages and Salaries | 3.2% | 3.4% | 3.3% | 3.5% | 3.6% |
| Benefits | 3.8% | 3.6% | 3.4% | 3.5% | 3.5% |
