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Economy in Brief

U.S. Employment Cost Index Increases Moderately
by Tom Moeller  January 31, 2017

The employment cost index for civilian workers rose 0.5% (2.2% y/y) during Q4'16, down slightly from the 0.6% Q3 gain. A 0.6% rise had been expected in the Action Economics Forecast Survey. Wages and salaries increased 0.5% (2.4% y/y) after a 0.5% rise, and benefits rose 0.4% (2.0% y/y) following a 0.7% gain.

The employment cost index for private industry workers increased 0.5% (2.2% y/y) following a 0.5% gain. Among industries, the index for manufacturing workers rose a lessened 0.5% (2.2% y/y). Construction worker compensation strengthened 0.7% (1.9% y/y). Service industries compensation improved 0.4% (2.2% y/y), down from a 0.6% Q3 rise. Compensation of finance industry workers rose an easier 0.6% (2.9% y/y). Trade, transportation and utilities rose 0.4% (2.8% y/y), and information increased 0.5% (2.0% y/y). Professional & business service compensation remained unchanged (1.2 % y/y), while education and health sector workers compensation rose a steady 0.5% (1.9% y/y). Leisure and hospitality sector workers saw their compensation rise 0.3% (3.3% y/y). In the public sector, compensation of state and local government workers rose 0.5% (2.4% y/y).

Wages and salaries in private industry rose a steady 0.5% (2.3% y/y). Factory sector wages increased 0.6% (2.6% y/y), but construction sector wages jumped 0.9% (2. 1% y/y). Wage gains in service industries eased to 0.4% (2.3% y/y). The increase in financial activity wages halved to 0.7% (3.3% y/y). Trade, transportation and utilities pay improved 0.5% (2.6% y/y) after a 0.3% rise, and information sector wages increased 0.6% (3.1% y/y) after a 0.8% rise. Professional and business service wages and salaries remained unchanged (1.3% y/y). Education & health services pay increased 0.6% (2.2% y/y), while leisure and hospitality wages increased 0.4% (3.7% y/y), a sharp slowdown from the prior three quarters. State and local government workers' wages increased a moderated 0.5% (2.1% y/y).

Benefits for private industry workers grew a lessened 0.4% (1.8% y/y), following a 0.5% increase. The rise in manufacturing eased to 0.2% (1.5% y/y) after three quarters of 0.4% rise. Private service industry benefits overall firmed 0.4% (1.8% y/y) after a 0.5% rise. In the public sector, state and local government worker benefits weakened to 0.7% (3.1% y/y) after a 1.2% jump.

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 (%) Q4'16 Q3'16 Q2'16 Q4 Y/Y 2016 2015 2014
Compensation 0.5 0.6 0.6 2.2 2.2 2.1 2.1
 Wages & Salaries 0.5 0.5 0.6 2.4 2.3 2.2 1.9
 Benefit Costs 0.4 0.7 0.5 2.0 2.0 2.0 2.5
Private Industry Workers (%)      
Compensation 0.5 0.5 0.6 2.2 2.1 2.1 2.1
 Wages & Salaries 0.5 0.5 0.6 2.3 2.4 2.3 2.0
 Benefit Costs 0.4 0.5 0.4 1.8 1.6 1.6 2.3
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