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Economy in Brief

U.S. Employment Cost Index Remains Firm
by Tom Moeller  January 29, 2016

The employment cost index for civilian workers increased 0.6% (2.0% y/y) during Q4'15, as expected in the Action Economics Forecast Survey. Wages increased 0.6% (2.1% y/y) for a second month and benefits rose 0.7% (1.8% y/y).

The employment cost index for private industry workers improved 0.5% in Q4'15 (1.9% y/y), following an unrevised 0.6% rise during Q3. The index for the professional & business services sector posted a 0.6% gain (1.8% y/y) and that followed a 1.0% rise. Trade, transportation & utility workers compensation ticked 0.1% higher (2.0% y/y) following a 1.0% jump. Information sector compensation rose 0.2% (-1.8% y/y) after a 0.7% rise. Education & health services workers realized 0.5% growth (1.7% y/y) after a 0.5% increase. Factory workers compensation rose an accelerated 0.7% (2.5% y/y) and construction workers saw 0.7% growth (2.2% y/y), the quickest since 2009. In the public sector, state & local government workers compensation rose 0.8% (2.5% y/y), the firmest rise in over seven years.

Wages in private industry rose 0.6% (2.1% y/y) following a 0.7% increase. Workers in professional & business services realized 0.6% wage growth (2.0% y/y) and that followed a 1.2% increase. Trade, transportation & utility wages ticked 0.1% higher (2.0% y/y) after a 1.1% jump. Information sector wages rose 0.3% (2.1% y/y), half the 0.6% growth during the of the prior four quarters. Wages in leisure & hospitality recovered 0.7% (1.9% y/y) following 0.3% decline. Factory sector wages grew a fairly steady 0.7% (2.7% y/y) but construction wages advanced an improved 0.8% (2.6% y/y). Wages for state & local government workers improved 0.4% (1.8% y/y) after a 0.3% gain.

Benefits of private industry workers grew 0.4% (1.2% y/y) following a 0.5% increase. Sales & office workers realized steady 0.6% growth (1.4% y/y). Workers in service occupations saw a 0.4% increase (1.7% y/y) and management & professional workers saw improved 0.6% growth (0.9% y/y). Factory sector workers benefits jumped 0.8% (2.3% y/y) after a 0.1% uptick. State & local government workers benefits jumped 1.4% (3.5% y/y), the y/y gain roughly the same as in the prior five years. These increases were down, however, versus the 6.0% growth of the prior decade.

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.

Private Industry Workers (%) Q4'15 Q3'15 Q2'15 Y/Y 2015 2014 2013
Compensation 0.5 0.6 0.0 1.9 2.1 2.1 1.9
 Wages & Salaries 0.6 0.7 0.2 2.1 2.2 2.0 1.9
 Benefit Costs 0.4 0.5 -0.2 1.2 1.6 2.3 1.9
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