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Economy in Brief

U.S. Employment Cost Index Strengthens
by Tom Moeller  October 31, 2014

The employment cost index for private industry workers jumped 0.7% (2.3% y/y) in Q3'14, following an unrevised 0.8% Q2 rise. These increases were the largest since Q4'07 and surpassed expectations for a 0.5% rise in the Action Economics Forecast Survey.

Wages & salaries of private industry workers increased 0.7% (2.2% y/y) last quarter after a 0.8% Q2 rise. These gains were the largest since early 2008. The 1.2% increase (2.5% y/y) in retail trade wages paced the gain followed by a 0.9% increase (2.3% y/y) in professional & business services wages. Leisure & hospitality wages gained 0.8% (2.0% y/y) while education services wages improved 0.7% (1.6% y/y). Financial activities wages increased 0.5% (1.9% y/y) and factory sector wages gained 0.3% (2.1% y/y). Information industry wages ticked 0.1% higher (1.2% y/y).

Benefit costs gained 0.6% (2.4% y/y) after a 1.1% Q2 jump. Manufacturing benefits increased 0.9% (2.5% y/y) while management & professional benefits improved 0.7% (2.4% y/y). Production & transportation benefits similarly gained 0.7% (2.1% y/y) while service industry benefits rose 0.7% as well (0.7% y/y). Natural resource, construction & maintenance worker benefits increased 0.5% (3.3% y/y) and sales & office workers benefits rose 0.3% (2.4% y/y).

Total compensation for state & local government workers rose 0.5% (2.1% y/y) for the third straight quarter. That reflected a 0.6% rise (1.5% y/y) for health care & social assistance employees and a 0.5% gain (1.9% y/y) in education & health services. Public administration total compensation improved 0.4% (2.4% y/y).

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 (%) Q3'14 Q2'14 Q1'14 Q3 Y/Y 2013 2012 2011
Compensation 0.7 0.8 0.3 2.3 1.9 2.0 2.1
 Wages & Salaries 0.7 0.8 0.2 2.2 1.9 1.8 1.6
 Benefit Costs 0.6 1.1 0.3 2.4 1.9 2.2 3.5
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