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Economy in Brief

U.S. Employment Cost Index Up an Expected 0.9%
by Tom Moeller July 31, 2007

For private industry workers, the employment cost index rose an expected 0.9% last quarter. The gain followed a more modest 0.6% 1Q increase that was held back by a 0.3% decline in benefits costs.

Benefit costs rebounded 1.1% from the prior quarter’s move down. The cost of health benefits increased 4.8% y/y, continuing the slowdown of the last four years.

Wage and salary growth at 0.8% was lower than the 1.1% the prior quarter but the y/y growth of 3.4% was near the strongest of the last five years. Wages account for roughly 70% of the compensation index.

ECI- Private Industry Workers 2Q 1Q Y/Y 2006 2005 2004
Compensation 0.9% 0.6% 3.1% 2.9% 3.1% 3.8%
  Wages & Salaries 0.8% 1.1% 3.4% 2.9% 2.5% 4.7%
  Benefit Costs 1.1% -0.3% 2.7% 2.9% 4.6% 6.8%
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