Global| Jan 31 2006Employment Cost Index Steady Last Quarter, Down During '05
by:Tom Moeller
|in:Economy in Brief
Summary
For private industry workers, the employment cost index rose a steady 0.8% last quarter. The increases during the last two quarters were up from 0.6% gains during 1Q & 2Q but they were off the 1.0% average of the prior two years. [...]
For private industry workers, the employment cost index rose a steady 0.8% last quarter. The increases during the last two quarters were up from 0.6% gains during 1Q & 2Q but they were off the 1.0% average of the prior two years. Consensus expectations had been for a 0.9% 4Q increase.
The 2.8% increase in the ECI during 2005 was the lowest in ten years.
The increase in benefit costs eased last quarter to 0.9% from the quick 1.3% during 3Q. For the full year, the rise in benefit costs moderated substantially to 4.1% from the peak 7.1% increase during 2004. Benefit costs in manufacturing rose 1.3% (4.9% y/y). The yearly increase compared to a 10.1% rise during 2004.
The cost of health benefits rose 6.4% y/y and for the year was the slowest rate on increase since 1999.
Wage and salary growth continued at 0.6% for the fourth straight quarter. The annual gain of 2.5% about equaled 2004 but was down sharply from the 4.0% increase during 1997. Wages account for roughly 70% of the compensation index.
Gauging the Size of Today's Price Shocks from the Federal Reserve Bank of St. Louis is available here.
| ECI- Private Industry Workers | 4Q '05 | 3Q '05 | Y/Y | 2005 | 2004 | 2003 |
|---|---|---|---|---|---|---|
| Compensation | 0.8% | 0.8% | 2.8% | 2.8% | 3.9% | 4.2% |
| Wages & Salaries | 0.6% | 0.6% | 2.5% | 2.5% | 2.4% | 3.0% |
| Benefit Costs | 0.9% | 1.3% | 4.1% | 4.1% | 7.1% | 6.6% |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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