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Economy in Brief

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

The employment cost index for civilian workers increased 0.6% (1.9% y/y) during Q1'16 following a 0.5% rise. The latest gain was as expected in the Action Economics Forecast Survey. Wages increased 0.7% (2.0% y/y) after a 0.5% rise, and benefits rose 0.5% (1.7% y/y) following two quarters of 0.6% gain.

The employment cost index for private industry workers improved 0.6% in Q1'16 (1.8% y/y), following an unrevised 0.5% rise during Q4. The index for the professional & business services sector posted a stable 0.6% gain, though the y/y increase moderated significantly to 1.1%. Trade, transportation & utility workers compensation strengthened 1.2% (2.8% y/y) following a 0.1% gain. Information sector compensation rose 0.7% (-2.1% y/y) after a 0.3% rise. Education & health services workers realized 0.4% growth (1.6% y/y) after a 0.4% increase. Factory workers compensation rose 0.5% (2.3% y/y) and construction workers saw 0.5% growth (2.4% y/y). In the public sector, state & local government workers compensation rose 0.5% (2.5% y/y) following a 0.8% jump.

Wages & salaries in private industry rose 0.7% (2.1% y/y) following a 0.6% increase. Workers in professional & business services realized 0.9% wage growth (1.3% y/y) and that followed a moderated 0.6% increase. Trade, transportation & utility wages jumped 1.0% (2.5% y/y) after a 0.1% rise. Information sector wages strengthened 1.2% (2.7% y/y) after a 0.4% gain. Wages in leisure & hospitality rose 1.1% (2.3% y/y) following a 0.6% increase. Factory sector wages grew a fairly steady 0.6% (2.6% y/y), and construction wages advanced a moderated 0.5% (2.6% y/y). Wages for state & local government workers improved 0.4% (1.8% y/y) after a 0.5% gain.

Benefits of private industry workers grew 0.5% (1.2% y/y) following a 0.4% increase. Sales & office workers realized a 1.1% jump (2.4% y/y) after a 0.5% rise. Workers in service occupations saw a 0.6% increase (1.9% y/y) and management & professional workers saw no change (0.3% y/y). Factory sector workers benefits rose 0.4% (1.9% y/y) after a 0.8% jump. State & local government worker benefits increased a lessened 0.6%. The y/y gain of 3.4% was a bit higher than during the prior six 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.

Civilian Workers (%) Q1'16 Q4'15 Q3'15 Q1 Y/Y 2015 2014 2013
Compensation 0.6 0.5 0.6 1.9 2.1 2.1 1.9
 Wages & Salaries 0.7 0.5 0.6 2.0 2.2 1.9 1.7
 Benefit Costs 0.5 0.6 0.6 1.7 2.0 2.5 2.3
Private Industry Workers (%)            
Compensation 0.6 0.5 0.6 1.8 2.1 2.1 1.9
 Wages & Salaries 0.7 0.6 0.7 2.1 2.3 2.0 1.9
 Benefit Costs 0.5 0.4 0.5 1.2 1.6 2.3 1.9
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