Lifted by outsized rises in several industries, the employment cost index for civilian workers rose 0.8% (2.4% y/y) during Q1'17, compared to just 0.5% in Q4'16. A 0.6% rise had been expected in the Action Economics Forecast Survey. Wages and salaries also increased 0.8% (2.5% y/y) after a 0.5% rise, and benefits were up 0.7% (2.2% y/y) following a 0.5% gain.

The employment cost index for private industry workers also rose 0.8% (2.3% y/y) following a 0.5% gain. Among industries, the biggest increase came in leisure & hospitality, 1.9% in the quarter (4.3% y/y) after 0.6% the previous period; there were 1.0% quarterly gains in construction (2.5% y/y) after 0.7%, and in trade, transportation & utilities (2.7% y/y), which followed 0.5% in Q4. Professional & business services had a 0.9% (1.6% y/y) increase after just 0.2% in Q4. Manufacturing sector compensation rose 0.5% (2.1% y/y), the same as in Q4; with a like pattern for private sector education & health workers. The industries where worker compensation slowed were information, 0.3% (1.7% y/y), down from 0.5%, and finance, just 0.2% (2.9% y/y) after 0.6%. In the public sector, compensation of state and local government workers rose 0.6% (2.6% y/y), the same as in Q4.

Wages and salaries in private industry rose 0.9% (2.6% y/y). The pattern of strength and weakness among industries was very similar to total compensation; leisure & hospitality wages advanced 1.6% (4.6% y/y), trade, transportation & utilities were up 1.5% (3.1% y/y) and construction sector wages gained 1.1% (2.7% y/y). Professional & business services workers saw a 0.7% raise (1.4% y/y), while manufacturing and education & health both had 0.6% increases (manufacturing 2.6% y/y and education & health, 2.2% y/y). Wages were flat in the information sector (2.0% y/y), and they actually went down 0.2% in finance (2.8% y/y). State and local government workers' wages increased 0.6% (2.2% y/y).

Benefits for private industry workers picked up a bit in Q1'17, growing 0.6% (1.9% y/y) after Q4's 0.4%. The rise in manufacturing workers' benefits increased 0.5% (1.5% y/y) after just 0.2% in Q4. Private service industry benefits firmed noticeably, by 0.8% (2.0% y/y) following just 0.3%. In the public sector, state and local government worker benefits were up 0.8% (3.2% y/y) after Q4's 0.7% increase.

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.