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Economy in Brief
German PPI Rises at Nine-Month High Pace
The German PPI gained 0.2% in June on the heels of a 0.6% rise in May...
U.S. Leading Economic Indicators Improve
The Conference Board's Composite Index of Leading Economic Indicators increased 0.5% (5.8% y/y) during June...
Philadelphia Fed Factory Conditions Recover; Prices Surge
The Philadelphia Fed reported that its General Factory Sector Business Conditions Index rebounded to 25.7 during July...
U.S. Initial Unemployment Insurance Claims Hit Lowest Since 1969
Initial claims for unemployment insurance dropped to 207,000 during the week ended July 14...
Japan's Trade Deficit Swings Back to Surplus (Small Surplus)
Japan's early June trade results show a goods trade position having swung back to surplus in June from deficit in May...
by Carol Stone October 31, 2007
The employment cost index slowed to an 0.8% advance for private industry workers in Q3, compared to 0.9% in Q2 and a Consensus forecast of 0.9%.
Wage and salary growth held at the 0.8% quarterly pace seen in Q2, with the year/year growth also at Q2's amount, 3.4%. Wages account for roughly 70% of the compensation index. The largest recent increase was 1.1% in Q1, driven by outsized increases in several industries.
Benefit costs dropped back from Q2's 1.1% to 0.8%; this put the year/year increase at 2.4%. For the first three quarters this year, the year/year growth rates are the lowest since 1998. This is at least in part due to a more moderate rise in the cost of health benefits, which was up 4.8% y/y again in Q3, the same as in Q2 and less than half the pace of 2002 and 2003.
Compensation costs also eased for state and local government workers. This group saw a rise of 0.8% in Q3, less than 1.1% in Q2 and 1.3% in Q1 and the lowest since Q1 2006. The move was in benefits, which rose "only" 0.7% in Q3, following 1.7% in Q2 and 2.1% in Q1. Wages and salaries actually picked up in Q3 to 1.0% from 0.8% in Q2.
| ECI- Private Industry Workers | 3Q | 2Q | 1Q | Y/Y | 2006 | 2005 | 2004 |
|---|---|---|---|---|---|---|---|
| Compensation | 0.8% | 0.9% | 0.6% | 3.1% | 2.9% | 3.1% | 3.8% |
| Wages & Salaries | 0.8% | 0.8% | 1.1% | 3.4% | 2.9% | 2.5% | 4.7% |
| Benefit Costs | 1.1% | 1.1% | -0.3% | 2.7% | 2.9% | 4.6% | 6.8% |
| ECI- State & Local Government Workers | 0.8% | 1.1% | 1.3% | 4.3% | 3.9% | 3.8% | 3.4% |
