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Economy in Brief

U.S. Employment Cost Index Rose Slightly Q/Q But Reaches A New Low Y/Y
by Tom Moeller October 30, 2009

Employment compensation picked up slightly last quarter, but high unemployment dragged down the y/y change to its lowest on record. (The series dates back to 1980). The total employment cost index for private industry workers rose 0.5% during 3Q following gains of 0.2% during the prior two quarters. The latest rise about matched Consensus expectations.

Improved wage and salary growth provided most of the "oomph" to last quarter's gain with a 0.5% rise. However, here again, the y/y gain of 1.3% was a new record low. In the factory sector wages rose just 1.2% y/y but in the education & health care sectors wages rose a still-modest 1.8%. In the goods producing sector wage growth fell to just 1.2% and in education & health services they rose 1.8%.

Total benefit costs in private sector increased just 0.3% and the 1.0% y/y gain was a record low. What y/y strength there was was led by a 2.3% gain in production, transportation & materials handling industries and a 1.6% rise in services occupations. The cost of health benefits showed a stable 4.7% rise in the latest 12 months. · The employment cost index figures are available in Haver's USECON database.

Financial Intermediaries and Monetary Economics from the Federal Reserve Bank of New York can be found here. 

ECI - Private Industry Workers (%) 3Q '09 2Q '09 1Q '09 3Q Y/Y 2008 2007 2006
Compensation 0.5 0.2 0.2 1.3 2.8 3.1 2.9
  Wages & Salaries 0.5 0.2 0.2 1.3 3.0 3.4  2.9
  Benefit Costs 0.3 0.2 0.2 1.0 2.6 2.4 2.9
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