Global| Oct 29 2010U.S. Employment Cost Index Remains Sluggish; State & Local Govt Flat
Summary
The employment cost index for private industry workers slowed to a 0.4% increase in Q3 total compensation from 0.5% growth in Q2. The year-on-year gain was 2.0%, a little bit better than Q2's 1.9%. For all civilian workers, the [...]
The employment cost index for private industry workers slowed to a 0.4% increase
in Q3 total compensation from 0.5% growth in Q2. The year-on-year gain
was 2.0%, a little bit better than Q2's 1.9%. For all civilian
workers, the quarterly increase was also 0.4%, compared with forecast
expectations of 0.5%.
Workers in state and local governments experienced flat compensation on the quarter, following a 0.6% increase in Q2. This brought the year-on-year increase to 1.7% in Q3 from 1.8% the quarter before. This yearly change is a record low for this series that began in 1982; before this year, the lowest such reading had been 2.3% in a couple of quarters during 1997 and 1998.
Growth in private sector wages & salaries held steady at 0.4% for a third consecutive quarter. Among occupational groups, wages of management and professional workers and of sales and office workers grew more slowly; those of natural resource, construction and maintenance workers held to a slim 0.2% increase, while those of production and transportation workers picked up compared to their Q2 performances. Factory sector wages grew 0.5%, the same as in Q2, and workers in service industries sustained their recent range with a 0.4% increase.
Wages of state and local government workers fell outright by 0.3%. This is the second quarterly decrease ever; the other one, 0.1%, was in Q3 last year. This time, workers in all segments of state and local government -- education, health care and public administration -- experienced the declines. We would speculate that these reflect the budget pressures many governments are facing, as many of them also have fiscal years that began July 1.
The growth in benefit costs in the private sector repeated the 0.5% rise of 2Q in Q3, with mixed moves of modestly bigger or smaller gains among occupational segments. Benefits for state and local government workers rose, but they moderated to a 0.7% rise following 0.9% in Q2.
The employment cost index figures are available in Haver's USECON database.
| ECI - Private Industry Workers (%) | Q3 '10 | Q2 '10 | Q1 '10 | Q3 Y/Y | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|---|---|
| Compensation | 0.4 | 0.5 | 0.6 | 2.0 | 1.5 | 2.8 | 3.1 |
| Wages & Salaries | 0.4 | 0.4 | 0.4 | 1.6 | 1.5 | 3.0 | 3.4 |
| Benefit Costs | 0.5 | 0.5 | 1.4 | 2.8 | 1.2 | 2.6 | 2.4 |
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
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