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Economy in Brief

U.S. Employment Cost Index Jumps in Q2
by Tom Moeller  July 31, 2014

The employment cost index for private industry workers surged 0.8% (2.1% y/y) in Q2'14, following an unrevised 0.3% rise in Q1. The increase was the largest since Q4 2007 and surpassed expectations for a 0.5% rise in the Action Economics Forecast Survey.

Wages & salaries of private industry workers increased 0.8% (1.9% y/y) last quarter after a 0.2% Q1 rise. The 1.1% increase (1.7% y/y) in professional & business services wages led the rise while information industry wages rose 0.9% (1.6% y/y). In the factory sector, wages rose 0.8% (2.2% y/y). Education workers wages rose 0.5% (1.4% y/y) and retail trade wages also gained 0.5% (1.6% y/y). Leisure & hospitality industry workers wages advanced 0.3% (1.4% y/y) while financial activities workers wages nudged 0.2% higher (2.0% y/y).

Benefit costs surged 1.1% (2.4% y/y) after a modest 0.3% Q1 gain. Management & professional benefits jumped 1.2% (2.5% y/y) as did sales & office workers benefits (2.7% y/y). Production & transportation benefits gained 0.2% (1.5% y/y) while factory sector benefits bumped 0.1% higher (1.9% y/y).

Total compensation for state & local government workers rose 0.5% (2.0% y/y), the same as in Q1. That reflected a 0.9% rise (2.8% y/y) for public administration workers, a 0.6% rise (1.5% y/y) for health care & social assistance employees and a 0.4% gain (1.8% y/y) in education services.

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 (%) Q2'14 Q1'14 Q4'13 Q2 Y/Y 2013 2012 2011
Compensation 0.8 0.3 0.5 2.1 1.9 2.0 2.1
 Wages & Salaries 0.8 0.2 0.5 1.9 1.9 1.8 1.6
 Benefit Costs 1.1 0.3 0.4 2.4 1.9 2.2 3.5
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