A measure of total employee compensation costs, including wages and salaries as well as benefits. The employment cost index (ECI) is the broadest measure of labor costs. Why Investors Care
| Released on 4/27/07 For Q1 2007 | |||||||||||||||||||
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Highlights
The employment cost index rose a softer-than-expected 0.8 percent in the first quarter though the wage & salary component did show pressure, up 1.1 percent for the steepest gain in six years. Offsetting the rise was a minimal increase of 0.1 percent in benefits, which in the past at least has been a sensitive topic among Federal Reserve officials. The benefit reading, subdued by lower employer contributions to retirement plans, is the lowest in eight years.
The capital markets were on the move Friday morning but less in reaction to this report and more to a GDP report that showed slower growth with rising inflation. Though benefits in the ECI report were soft, the rise in wages & salaries may feed new concerns over inflation. Next reading on wage pressures will be in next week's employment report.
The employment cost index for civilian workers eased to a quarterly 0.8 percent in the fourth quarter from a 1.0 percent rise in the third quarter. Still, the fourth quarter rate is high enough to indicate wage pressure - a key concern for the Fed.
Employment cost index Consensus Forecast for Q1 07: +1.0 percent simple quarterly rate
Range: +0.8 to +2.2 percent simple quarterly rate
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The employment cost index measured total compensation costs which include wages and salaries and also benefits. Benefits include vacations, but the primary mover is health insurance premiums. |
| 2007 Release Schedule | ||||||||||
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