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Economy in Brief
Composite PMIs...the Best of Times; the Worst of Times-Really?
PMI data now rank observations on their range of values since December 2016...
U.S. Housing Starts Rise Again in December
Housing starts increased 5.8% (5.2% y/y) during December to 1.669 million...
Philadelphia Fed Manufacturing Index Jumps in January
The Federal Reserve Bank of Philadelphia Factory Sector Business Conditions Index jumped to January to 26.5...
U.S. Initial Jobless Claims Ease, but Are Still High
Initial claims for unemployment insurance fell to 900,000 in the week ended January 16...
French Surveys Improve Despite Ongoing Virus Issues
The spread of the virus in Franc is still untamed...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Carol Stone, CBE April 27, 2018
The employment cost index (ECI) for civilian workers rose 0.8% q/q in Q1 2018, tying Q1 2017 as the strongest quarterly move since late 2007. This Q1 move firmed from 0.6% in Q4 2017 and generated a y/y rise of 2.7%, the same as in Q4. The Action Economics Forecast Survey had looked for a 0.7% q/q increase.
Wages and salaries for civilian workers (including private plus state & local government, but not federal government) were up 0.9% in Q1 (2.7% y/y), compared with 0.5% in Q4. Benefits for civilian workers rose 0.7% (2.6% y/y), also comparing with 0.5% in Q4.
Employment costs in private industry advanced a full percentage point in Q1 after Q4's weaker 0.5% and they were up 2.8% y/y. Gains in Q1 were seemingly "everywhere". Finance and insurance had the largest increase in the quarter, 1.8%, but sectors often thought to be less dynamic also had sizable rises: wholesale trade 1.0%, retail trade 1.1%, transportation and warehousing 1.3%, and accommodation and food services 1.4%. Among other industries, manufacturing compensation was up 0.7%, professional services 0.8%, and information 0.6%. Even as these might appear somewhat sluggish, they all showed improvement from Q4 moves. The only sectors with compensation gains less than in Q4 were administrative and waste support, with 0.5% in the latest period versus 0.6% in Q4, and educational services, also with the 0.5% versus 0.6%; labor costs in hospitals increased 0.5% in both periods.
The wages and salaries component in private industries also advanced a full percentage point versus 0.5% in Q4; the y/y gain was 2.9%. Benefits increased 0.8% in Q1, doubling their 0.4% rise in Q4, with a 2.6% increase y/y.
Labor costs slowed noticeably among state and local governments, with Q1 up just 0.4% after 0.7% in Q4; the y/y increase was 2.3%. Wages and salaries in that sector were also up 0.4% in Q1, following 0.6% in Q4, generating a modest 1.8% rise y/y. Benefits rose 0.5% in Q1 following Q4's 0.9% and had a y/y increase of 2.9%.
The employment cost index figures are available in Haver's USECON database. Consensus estimates come from the Action Economics survey in Haver's AS1REPNA database. This quarter's release included annual seasonal adjustment revisions affecting the last five years.
Civilian Workers (% chg) | Q1'18 | Q4'17 | Q3'17 | Q1'18 Y/Y | 2017 | 2016 | 2015 |
---|---|---|---|---|---|---|---|
Compensation | 0.8 | 0.6 | 0.7 | 2.7 | 2.5 | 2.2 | 2.1 |
Wages & Salaries | 0.9 | 0.5 | 0.7 | 2.7 | 2.5 | 2.3 | 2.2 |
Benefit Costs | 0.7 | 0.5 | 0.8 | 2.6 | 2.4 | 2.0 | 2.0 |
Private Industry Workers (% chg) | |||||||
Compensation | 1.0 | 0.5 | 0.8 | 2.8 | 2.5 | 2.1 | 2.1 |
Wages & Salaries | 1.0 | 0.5 | 0.8 | 2.9 | 2.6 | 2.4 | 2.3 |
Benefit Costs | 0.8 | 0.4 | 0.7 | 2.6 | 2.2 | 1.6 | 1.6 |