Recent Updates

  • China: Manufacturing PMI, Nonmanufacturing PMI, Steel PMI (Jul)
  • Thailand Foreign Trading by SET and Mai (Jul)
  • Thailand: Credit Conditions Survey (Q2)
  • US: Petroleum Supply Monthly, Natural Gas Monthly (May)
  • more updates...

Economy in Brief

U.S. Employment Cost Index Increase Eased Slightly During 4Q; 2008 Gain A Record Low
by Tom Moeller January 30, 2009

Weak job markets have held down compensation. For private industry workers, the employment cost index increased by 0.5% during 4Q. The rise eased slightly from the 0.6% 3Q increase and it left costs up 2.9% for the full year. That was down slightly from the 3.1% rise during 2007 and the quarterly gain fell short of Consensus expectations for a 0.7% rise. A notion of weakness in compensation growth was emphasized by the 4Q-to-4Q rate of increase of 2.4%. That was the weakest in the series' history which extends back to 1980.

The rise in benefit costs was the main cause of the slowdown in overall compensation costs. The quarterly increase slowed to 0.2%, the weakest since early last year. The 2.0% year-to-year rise was near the slowest since 1999. In the goods producing sector benefits ticked up 0.1% (1.5% y/y) and in services they nudged up just 0.2% (2.2% y/y) after a 0.6% 3Q gain.

Health benefit costs rose 3.5% y/y and that was the slowest rate of growth since 1998.

Wage and salary growth of 0.3% was half the rate of increase during 3Q. Wages account for roughly 70% of the compensation index. The 4Q-to-4Q gain of 2.6% clearly was restrained by the weak job market and it was the weakest increase since 2006. Wages in the services industries grew a modest 0.3% and the y/y gain of 2.6% also was the weakest since 2006. Wages in the goods producing industries rose 0.4% (2.8% y/y) and that y/y growth compares to a recent peak of 4.0% in 2000.

ECI - Private Industry Workers (%) 4Q '08 3Q '08 4Q Y/Y 2008 2007 2006
Compensation 0.5 0.6 2.4 2.9 3.1 2.9
  Wages & Salaries 0.3 0.6 2.6 3.0 3.4 2.9
  Benefit Costs 0.2 0.5 2.0 2.5 2.4 2.9
large image