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Economy in Brief

U.S. Employment Cost Index Firms in Q2
by Carol Stone  July 31, 2013

The employment cost index for private industry workers advanced 0.6% (1.9% y/y) in Q2'13, following an upwardly revised 0.4% increase in Q1. The result was stronger than consensus expectations for 0.4%. Q1 and the prior couple of quarters had been "corrected" by the BLS in June, erasing the unusually weak numbers we discussed in this commentary in April.

Wage salary costs in private industry were also up 0.6% in Q2, firmer than Q1's 0.5% increase, putting them up 1.9% from a year earlier. Management and professional staff saw a 2.1% yearly increase, up from 1.9% in Q1 and the largest for that occupational category since Q1 2009. Sales and office staff also picked up, to 1.9% y/y from 1.8% in Q1. Construction and maintenance workers held to a 1.5% wage gain on the year earlier, the same as in Q1, and production and transportation workers saw 1.8% yearly increases in both Q1 and Q2.

The BLS data corrections concerned benefits, and the 0.3% q/q decline originally reported for Q1 is now shown as a 0.4% increase. They continued at a 0.4% pace in Q2, putting them up 1.9% from Q2 2012.

Compensation for state and local government workers was up 1.7% in Q2 versus a year earlier, a bit slower than 1.9% in Q1. Their wages and salaries increased 1.0% in both quarters from year-ago amounts, while their benefits slowed to a 3.3% gain in Q2 from 3.5% in Q1.

The employment cost index figures are available in Haver's USECON database. Consensus estimates come from the Action Economics survey, carried in Haver's AS1REPNA database.

 

ECI- Private Industry Workers (%) Q2'13 Q1'13 Q4'12 Q2 Y/Y 2012 2011 2010
Compensation 0.6 0.4 0.4 1.9 1.9 2.2 1.9
 Wages & Salaries 0.6 0.5 0.3 1.9 1.8 1.7 1.6
 Benefit Costs 0.4 0.4 0.6 1.9 2.2 3.4 2.6
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