Recent Updates
- Composite PMIs: Hong Kong, Japan, Singapore, Ireland, China (Feb)
- US: Autodata Vehicle Sales (Feb)
- New Zealand: Regional Building Consents (Jan)
- more updates...
Economy in Brief
U.S. Gasoline & Crude Oil Prices Continue to Strengthen
The price of regular gasoline strengthened to $2.71 per gallon (11.9% y/y) in the week ended March 1...
Post Covid-19 Turbulence Rocks and Weakens German Retail Sales
German and other European retail sales have been put through a sort of test of fire in the wake of the covid-19 virus arrival...
ISM Manufacturing Index Improves in February as Prices Continue to Strengthen
Factory sector activity recovered last month following moderate weakening in January...
NABE Projects Firm Growth in 2022, as in 2021
The NABE expects 4.0% real GDP growth in 2022 following a 4.8% rise during 2021...
U.S. Construction Spending Strengthens Again in January
Building activity continues to strengthen...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Gerald D. Cohen October 30, 2020
• Overall compensation increased 0.5% in Q3 with year-on-year growth slowing to 2.4%.
• Wages and salaries up 0.4% (2.5% y/y) while benefits gain 0.6% (2.3% y/y).
The employment cost index (ECI) for civilian workers rose 0.5% in the third quarter of 2020, in line with expectations from the Action Economics Forecast Survey, and the same increase as Q2. Year-on-year growth of total compensation decelerated to 2.4% in Q3 from 2.7% in Q2. This is the slowest year-on-year growth in three years. Compensation growth was 2.8% y/y in 2019Q4; the cycle high was 2.9% in 2018Q3.
Wage and salaries increased 0.4% in 2020Q3 (2.5% y/y), a deceleration from the 2.9% y/y gain in Q2 and 3.1% in Q1, which was the cycle high. Benefits grew 0.6% (2.3% y/y), a slight acceleration from the second quarter's 2.2% y/y growth. Benefits increased 2.1% y/y in Q1, the slowest growth since the end of 2016.
Private sector compensation, wages and salaries, as well as benefits showed a similar pattern to all civilian workers (see table and graphs below). Compensation in both goods-producing industries grew 0.3% in Q3 (2.2% y/y), a significant slowdown from the 2.8% y/y growth in the Q2. Service-providing workers experienced less deceleration with compensation up 0.5% in the quarter and year-on-year growth of 2.5% down from 2.7%. Overall pay for non-incentive paid occupations increased 0.6% (not seasonally adjusted) and 2.4% y/y, down from 2.6% y/y in Q2.
The employment cost index, which measures the change in the cost of labor, free from the influence of employment shifts among occupations and industries, is available in Haver's USECON database. Consensus estimates from the Action Economics survey are in Haver's AS1REPNA database.
Civilian Workers (% chg) | Q3'20 | Q2'20 | Q1'20 | Y/Y | 2019 | 2018 | 2017 |
---|---|---|---|---|---|---|---|
Compensation | 0.5 | 0.5 | 0.8 | 2.4 | 2.7 | 2.8 | 2.5 |
Wages & Salaries | 0.4 | 0.4 | 0.9 | 2.5 | 2.9 | 2.9 | 2.5 |
Benefit Costs | 0.6 | 0.8 | 0.4 | 2.3 | 2.4 | 2.7 | 2.4 |
Private Industry Workers (% chg) | |||||||
Compensation | 0.5 | 0.4 | 0.8 | 2.4 | 2.7 | 2.9 | 2.5 |
Wages & Salaries | 0.5 | 0.4 | 1.0 | 2.7 | 3.0 | 3.0 | 2.6 |
Benefit Costs | 0.5 | 0.7 | 0.2 | 2.0 | 2.0 | 2.6 | 2.2 |