Global| Apr 30 2021U.S. Employment Cost Growth Ticks Up in Q1
Summary
• Overall Compensation rose 0.9% in Q1; year-on-year growth accelerate slightly to 2.6%. • Wage and salaries increased 1% in Q1 (2.7% y/y), while benefits grew 0.6% (2.5% y/y). The employment cost index (ECI) for civilian workers rose [...]
• Overall Compensation rose 0.9% in Q1; year-on-year growth accelerate slightly to 2.6%.
• Wage and salaries increased 1% in Q1 (2.7% y/y), while benefits grew 0.6% (2.5% y/y).
The employment cost index (ECI) for civilian workers rose 0.9% in the first quarter of 2021, following a 0.7% rise in the fourth quarter of last year. The quarterly rise was also faster than the 0.7% consensus from Action Economics Forecast Survey. Year-on-year, total compensation rose 2.6%, slightly better than the 2.5% advance in the fourth quarter and matching the full-year 2020 advance.
Wage and salaries increased 1% in Q1 (2.7% y/y), up from 0.8% in Q4 2020 (2.6% y/y), while benefits grew 0.6%, matching the advances posting in Q3 and Q4 of 2020. The 2.5% year-on-year rise in Q1 was an acceleration from the 2.3% rise in the prior two quarters.
Private sector compensation rose 1% over the quarter (2.8% y/y), wages and salaries rose 1.1% (3% y/y), while private sector benefit rose 0.6% (2.5% y/y).
Compensation in goods- and service-producing industries grew 0.7% and 0.9%, respectively in Q1 (2.4% and 2.7% y/y), a slight pickup from the year-on-year growth experienced in Q4. Overall compensation for non-incentive paid occupations increased 0.8% (not seasonally adjusted) and 2.5% y/y. The y/y rise was the same as in Q4.
The employment cost index, which measures the change in the cost of labor, free from the influence of employment shifts among occupations and industries, is available in Haver's USECON database. Consensus estimates from the Action Economics survey are in Haver's AS1REPNA database
Kathleen Stephansen, CBE
AuthorMore in Author Profile »Kathleen Stephansen is a Senior Economist for Haver Analytics and an Independent Trustee for the EQAT/VIP/1290 Trust Funds, encompassing the US mutual funds sponsored by the Equitable Life Insurance Company. She is a former Chief Economist of Huawei Technologies USA, Senior Economic Advisor to the Boston Consulting Group, Chief Economist of the American International Group (AIG) and AIG Asset Management’s Senior Strategist and Global Head of Sovereign Research. Prior to joining AIG in 2010, Kathleen held various positions as Chief Economist or Head of Global Research at Aladdin Capital Holdings, Credit Suisse and Donaldson, Lufkin and Jenrette Securities Corporation.
Kathleen serves on the boards of the Global Interdependence Center (GIC), as Vice-Chair of the GIC College of Central Bankers, is the Treasurer for Economists for Peace and Security (EPS) and is a former board member of the National Association of Business Economics (NABE). She is a member of Chatham House and the Economic Club of New York. She holds an undergraduate degree in economics from the Universite Catholique de Louvain and graduate degrees in economics from the University of New Hampshire (MA) and the London School of Economics (PhD abd).
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