Global| Oct 31 2017U.S. Employment Cost Index Strengthens
by:Tom Moeller
|in:Economy in Brief
Summary
The employment cost index for civilian workers rose 0.7% (2.5% y/y) during Q3'17, up from a 0.5% increase in Q2'17. A 0.6% rise had been expected in the Action Economics Survey. Wages and salaries also increased 0.7% (2.5% y/y) after [...]
The employment cost index for civilian workers rose 0.7% (2.5% y/y) during Q3'17, up from a 0.5% increase in Q2'17. A 0.6% rise had been expected in the Action Economics Survey. Wages and salaries also increased 0.7% (2.5% y/y) after a 0.5% rise. Benefits were up 0.8% (2.5% y/y) following a 0.6% gain.
The employment cost index increase for private industry workers also accelerated to 0.8% (2.6% y/y) following a 0.5% gain. That matched the strongest quarterly increase since Q4'07. Amongst industries, manufacturing compensation strengthened 1.0% (2.6% y/y) after a 0.6% rise and construction compensation increased 0.5% (2.7% y/y) after a 0.4% gain. In service-providing industries, compensation increased 0.7% (2.5% y/y) following a 0.6% rise. Professional & business services compensation jumped 1.1% (2.7% y/y), the strongest increase since early 2015. Trade, transportation & utilities compensation rose 0.9% (2.9% y/y), the strongest increase since early last year. Information compensation rose 0.7% (2.6% y/y) on the heels of a 1.1% rise. Financial activities compensation moderated to 0.5% (2.4% y/y) after a 0.7% gain. Leisure & hospitality compensation moderated to 0.3% (3.4% y/y) as did education & health services compensation (1.9% y/y), both the weakest in two years. State & local government workers realized 0.6% compensation growth (2.4% y/y) after a 0.5% gain.
Wages & salaries for private industry workers increased 0.7% (2.6% y/y). Goods-producing wages increased 0.7% (2.6% y/y) as factory sector wages jumped 0.8% (2.5% y/y), the strongest increase since Q2'08. Construction wages advanced a firm 0.6% and jumped 3.0% y/y. In the service sector, wages rose 0.7% (2.6% y/y) after a 0.8% increase. Financial activity wages rose a moderated 0.5% (2.2% y/y) and information sector wages grew 0.7% (2.3% y/y). Professional & business service wages strengthened 1.2% (2.7% y/y), the firmest rise in two years. Leisure & hospitality wages advanced 0.4%. The 3.6% y/y gain was the best annual increase since its low of 0.7% in 2011. Education & health services wages grew a diminished 0.2% (2.1% y/y). Trade, transportation and utilities wages improved 0.8% (3.2% y/y). State & local government wages advanced 0.5% (2.0% y/y).
Benefits for private industry workers increased an accelerated 0.7% (2.4% y/y), the strongest increase since Q2'14. Factory sector benefits surged 1.7% (2.9% y/y), three times the recent rates of growth. Production & transportation workers benefit value strengthened 1.2% (2.8% y/y) while service-producing workers realized a steady 0.6% rise (2.3% y/y). Management & professional workers realized a moderated 0.5% gain (2.5% y/y) while sales & office workers saw steady 0.7% quarterly growth (2.0% y/y). State & local government workers benefits increased a fairly steady 0.8% (3.0% y/y).
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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