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Economy in Brief
Chicago Business Barometer Declines Sharply in February
The ISM-Chicago Purchasing Managers Business Barometer fell 4.3 points in February to 59.5...
Goods Trade Deficit Widened Slightly in January
The advance estimate of the U.S. trade deficit in goods widened slightly to $83.74 billion in January..
Japan's Industrial Sector Mounts a Comeback
Japan's IP surged in January gaining 4.3% compared to December...
Aircraft Orders Boost U.S. Durable Goods Orders in January
Manufacturers' orders for durable goods increased a much larger-than-expected 3.4% m/m (4.5% y/y) in January...
Kansas City Fed Manufacturing Index Increases Again in February
The Kansas City Fed reported that its manufacturing sector business activity index rose to 24 in February...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Gerald D. Cohen January 29, 2021
• Overall compensation increased 0.7% in Q4; year-on-year growth accelerates slightly to 2.5%.
• Wages and salaries up 0.9% (2.6% y/y) while benefits gain 0.6% (2.3% y/y).
The employment cost index (ECI) for civilian workers rose 0.7% in the fourth quarter of 2020, faster than the 0.5% consensus from the Action Economics Forecast Survey. Year-on-year growth of total compensation ticked up to 2.5% in Q4 from 2.4% in Q3. The third quarter year-on-year growth was the slowest in three years. Compensation increased 2.8% y/y in 2020Q1; the previous cycle high was 2.9% in 2018Q4.
Wage and salaries increased 0.9% in 2020Q4 (2.6% y/y), a slight acceleration from the 2.5% y/y gain in Q3. Benefits grew 0.6% (2.3% y/y), the same y/y growth as Q3. 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 goods- and service-producing industries grew 0.7% and 0.8% respectively in Q4 (2.4% and 2.6% y/y), a pickup from the year-on-year growth experienced in Q3. Overall pay for non-incentive paid occupations increased 0.6% (not seasonally adjusted) and 2.5% y/y, slightly higher than the 2.4% y/y in Q3.
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) | Q4'20 | Q3'20 | Q2'20 | Y/Y | 2020 | 2019 | 2018 |
---|---|---|---|---|---|---|---|
Compensation | 0.7 | 0.5 | 0.5 | 2.5 | 2.6 | 2.7 | 2.8 |
Wages & Salaries | 0.9 | 0.4 | 0.4 | 2.6 | 2.8 | 2.9 | 2.9 |
Benefit Costs | 0.6 | 0.6 | 0.8 | 2.3 | 2.2 | 2.4 | 2.7 |
Private Industry Workers (% chg) | |||||||
Compensation | 0.9 | 0.5 | 0.4 | 2.6 | 2.6 | 2.7 | 2.9 |
Wages & Salaries | 0.9 | 0.5 | 0.4 | 2.8 | 2.9 | 3.0 | 3.0 |
Benefit Costs | 0.6 | 0.5 | 0.7 | 2.1 | 1.9 | 2.0 | 2.6 |