Global| Oct 28 2016U.S. Employment Cost Index Increases at Steady Rate
by:Tom Moeller
|in:Economy in Brief
Summary
The employment cost index for civilian workers increased 0.6% (2.2% y/y) during Q3'16 for the third straight quarter. The rise matched expectations in the Action Economics Forecast Survey. Wages and salaries increased 0.5% (2.4% y/y) [...]
The employment cost index for civilian workers increased 0.6% (2.2% y/y) during Q3'16 for the third straight quarter. The rise matched expectations in the Action Economics Forecast Survey. Wages and salaries increased 0.5% (2.4% y/y) after a 0.6% rise, and benefits rose 0.7% (2.3% y/y) following a 0.5% gain.
The employment cost index for private industry workers increased 0.5% in (2.2% y/y) following a 0.6% gain. Among industries, the index for manufacturing workers rose a steady 0.6% (2.5% y/y). Construction worker compensation eased 0.1% (+1.9% y/y). Service industries compensation improved 0.6% (2.2% y/y), as it did in Q2. Compensation of finance industry workers surged 1.4% (3.1% y/y), the strongest rise since 2003. Trade, transportation and utilities rose 0.4% (2.4% y/y), and information increased 0.8% (1.9% y/y), up from 0.1%. Professional & business service compensation improved 0.2% (1.7% y/y), while education and health sector workers compensation rose 0.5% (1.9% y/y). Leisure and hospitality sector workers saw their compensation rise 0.5% (1.9% y/y). In the public sector, compensation of state and local government workers strengthened 0.9% (2.7% y/y), the strongest rise since 2008.
Wages and salaries in private industry rose 0.5% (2.4% y/y), the weakest rise since Q2'15. Factory sector wages increased a steady 0.7% (2.8% y/y), but construction sector wages dipped 0.2% (+2.0% y/y). Wage gains in service industries lessened to 0.5% after two quarters of 0.7% increase. Financial activity wages jumped 1.4% (3.4% y/y), the strongest rise since 2007. Trade, transportation and utilities pay improved 0.3% (2.2% y/y) after a 0.8% rise, but information sector wages increased 0.8% (2.9% y/y) after a 0.5% rise. Professional and business service wages and salaries edged 0.1% higher (1.9% y/y), the weakest performance in over a year. Education & health services pay increased 0.4% (2.1% y/y), while leisure and hospitality wages jumped another 1.0% (3.8% y/y), about the same as in the prior two quarters. State and local government workers' wages increased 0.7% (2.1% y/y), the strongest increase since 2008.
Benefits for private industry workers grew 0.5% (1.8% y/y), following a 0.4% increase. The rise in manufacturing was steady at 0.4% (2.1% y/y) for the last three quarters. Private service industry benefits overall firmed 0.6% (1.8% y/y) after a 0.3% rise. In the public sector, state and local government worker benefits strengthened 1.2% (3.7% y/y), double the increases in the prior two quarters.
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.
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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