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Economy in Brief

U.S. Employment Cost Index Improves With Benefits
by Tom Moeller April 30,2010

After sharp deterioration last year, the employment cost index for private industry workers gained 0.6% last quarter which was the largest increase since 2008. (The series dates back to 1980). The increase outpaced Consensus expectations for a 0.5% gain.

Total benefit costs in the private sector improved 1.4% during 1Q, the most for any quarter in five years. The gain included sales and office workers (2.0% y/y), construction & maintenance workers (3.1% y/y) and production & material handling employees (3.3% y/y). The cost of health benefits was an improved 4.5% in the latest 12 months.

Growth in wages worked the other way from benefits and moderated to 0.4%. Management, professional & related worker wages improved (1.4% y/y) while sales & office worker wages gained just 0.2% (1.7% y/y). Production & material handling worker wages ticked up just 0.2% (1.5% y/y), the least on record.

The employment cost index figures are available in Haver's USECON database.

ECI - Private Industry Workers (%) 1Q '10 4Q '09 3Q '09 1Q y/y 2009 2008 2007
Compensation 0.6 0.4 0.4 1.6 1.5 2.8 3.1
  Wages & Salaries 0.4 0.5 0.5 1.5 1.5 3.0 3.4
  Benefit Costs 1.4 0.3 0.3 2.1 1.2 2.6 2.4
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