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Economy in Brief

Employment Cost Index Remained Firm
by Tom Moeller January 31, 2007

The employment cost index for private industry workers increased 0.8% last quarter. That was less than the 1.0% rise expected by the Consensus, but during the latter part of 2006 the increases clearly accelerated versus the prior year.

For the full year 2006, the ECI grew 3.1% versus a 3.0% gain during 2005.

Wages & salaries grew 0.7% after a 0.8% 3Q rise. The full year saw an acceleration to 3.1% growth from 2.5% in 2005 and that was the fastest since 2001. Factory sector wages grew 0.7% (NSA, 2.3% y/y) and wages in the service-producing industries also grew 0.7% (3.3% y/y), the fastest in three years.

Benefit costs in private industry sustained the prior strong 3Q gain and grew 1.0% reflecting a 1.1% (3.7% y/y) surge in service industries.

The 12-month gain in health insurance benefits was stable at 4.9% but that was down from a 6.4% increase during 2005, a 7.3% rise during 2004 and a 10.5% 2003 rise.

To view the latest release with all the industry detail visit BLS site.

ECI- Private Industry Workers 4Q '06 3Q '06 Y/Y 2006 2005 2004
Compensation 0.8% 0.9% 3.1% 3.1% 3.0% 3.7%
  Wages & Salaries 0.7% 0.8% 3.1% 3.1% 2.5% 2.7%
  Benefit Costs 1.0% 1.0% 3.1% 3.1% 4.0% 6.6%
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