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Economy in Brief

U.S. Employment Cost Index Posts Stable Increase
by Tom Moeller  January 31, 2012

Labor compensation is growing at a steady rate. The employment cost index for private industry workers rose 0.4% in Q4 for total compensation versus an unrevised 0.4% Q2 rise. The Q4 increase fell short of expectations for a 0.4% rise as compiled by Bloomberg. The four-quarter gain of 2.1% remained near its highest since Q4'08.

Private sector wages & salaries grew a stable 0.4% and 1.7% y/y. Amongst industry groups, wages in retail trade rose 2.1% Q4/Q4, professional & business services grew 1.8% while wages in information increased 1.8% as well. Wages in the factory sector also rose 1.8%, while education & health increased 1.5%. At the low end of the scale, wages in construction grew 1.2%, leisure & hospitality increased 0.8% while state & local workers saw wage growth fall to a record low 0.9% y/y, down from the 2007 high of 3.6%.

Benefit costs rose an increased 0.7% versus Q3 while the four-quarter gain improved to 3.6%. By industry, benefits in goods-producing rose 4.0% and 3.4% in services. Benefits for state & local government workers lagged at a record-low 2.1% y/y. By occupation, production, transportation and material moving grew the quickest at 4.3%. For management, professional and related workers benefits grew 3.6% while those in service occupations rose 2.6%.

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

Are Consumers Eager To Borrow? from the Federal Reserve Bank of Cleveland is available here.

ECI - Private Industry Workers (%) Q4'11 Q3'11 Q2'11 Q4 Y/Y 2011 2010 2009
Compensation 0.4 0.4 0.8 2.1 2.2 1.9 1.4
 Wages & Salaries 0.4 0.4 0.5 1.7 1.7 1.6 1.6
 Benefit Costs 0.7 0.1 1.6 3.6 3.5 2.6 1.2
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