U.S. Employment Cost Index Strengthens in Q1
by:Tom Moeller
|in:Economy in Brief
Summary
- Increase is largest in one year.
- Wages remain strong; benefits gain improves.
- Both goods-producing & service-sector compensation move higher.
The employment cost index (ECI) for civilian workers rose 1.2% (4.2% y/y) during Q1’24 following a 0.9% Q4 increase, according to the Bureau of Labor Statistics. Earlier figures were revised. The latest increase was the strongest in four quarters, up from a 0.4% low in Q3’20. A 1.0% gain had been expected in the Action Economics Forecast Survey.
Wages and salaries for civilian workers rose 1.1% (4.3% y/y) in Q1, the same as in the prior two quarters. The increase was more than double its 0.4% low in mid-2020. Benefits rose 1.1% (3.8% y/y), up from 0.7% in Q4 and 0.9% in both of the quarters before that, and also more than double the Q2’21 low of 0.4%.
Private industry workers’ compensation rose 1.1% (4.1% y/y) in Q1 following two 0.9% increases. Wages and salaries for private industry workers increased 1.1% last quarter after two 1.0% gains. The 4.3% y/y increase was below the 5.6% high in Q2’22. Benefits for private industry workers rose 1.0% in Q1, up from 0.7% in Q4. Year-over-year, benefits were up 3.8% in Q1, down from a 5.1% rise in Q2‘22.
By industry sector, total compensation in goods-producing industries rose 1.1% (3.9% y/y) in Q1’24 following a 1.0% Q4 gain and 0.9% increases in the two prior quarters. In service-producing industries, total compensation increased 1.2% after rising 0.9% in Q4. The 4.2% y/y gain stood below a 5.2% y/y high which occurred throughout most of 2022.
The employment cost index measures the change in the cost of labor, free from the influence of employment shifts, across occupations and industries. It is provided by the Bureau of Labor Statistics and is available in Haver’s USECON database. Consensus estimates from the Action Economics Forecast Survey are 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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