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Economy in Brief

Employment Cost Index Stable As Benefit Costs Slowed
by Tom Moeller July 29, 2005

The employment cost index for private industry workers rose the same 0.6% last quarter as during 1Q05 and contrasted to Consensus expectations for a 0.8% increase.

The 0.8% increase in benefit costs was the slowest since early 2002 and reflected slower growth in the service sector while benefit costs grew more rapidly in manufacturing. The y/y gain in the cost of health benefits fell to 6.3%, the slowest since 1999.

Wage and salary growth was stable at 0.6%. Wages account for roughly 70% of the compensation index.

Labor Market Developments in the United States and Canada since 2000 from the Federal Reserve Bank of New York is available here.

ECI- Private Industry Workers 2Q '05 1Q '05 Y/Y 2004 2003 2002
Compensation 0.6% 0.6% 3.2% 3.8% 4.0% 3.2%
  Wages & Salaries 0.6% 0.6% 2.4% 2.4% 3.0% 2.7%
  Benefit Costs 0.8% 1.1% 4.9% 6.9% 6.4% 4.7%
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