U.S. Employment Cost Index Ticks Up Modestly in Q1
Summary
- Steady increase in ECI since mid-2021.
- Wages and benefits for all workers both advanced 1.2% in Q1.
- Goods-producing industries slightly stronger than service-providers.
The employment cost index (ECI) for civilian workers rose 1.2% seasonally adjusted in Q1 2023, slightly stronger than the 1.1% increase in Q4 2022, according to Bureau of Labor Statistics data. The Action Economics Forecast Survey expected a 1.1% rise for Q1. Compared to a year ago, the overall ECI advanced 4.8% in Q1 after 5.1% in Q4, not seasonally adjusted. Since mid-2021, the ECI has held to a tight range of 1.1% to 1.4% each quarter.
The wages and salaries component and the benefits component for all civilian workers also both increased 1.2% seasonally adjusted in Q1. Wages and salaries had risen at the 1.2% pace in Q4, while benefits were up 1.1%. Year-on-year, wages and salaries rose 5.0% in Q1, not seasonally adjusted, and benefits rose 4.5%.
For private industry workers, total compensation also increased 1.2% in Q1, seasonally adjusted, producing a 4.8% increase from a year ago not seasonally adjusted; quarterly, seasonally adjusted compensation was up from 1.1% in Q4. Wages and salaries for private sector workers rose 1.3% in Q1 seasonally adjusted after 1.0% in Q4; Q1 over Q1, wages and salaries were up 5.1% not seasonally adjusted, the same as in Q4. Benefits rose 1.1% in Q1, up moderately from 0.9% in Q4, seasonally adjusted and 4.3% from Q1 2022 not seasonally adjusted.
By industrial sector, total compensation in goods-producing industries increased 1.2% in Q1, after 0.9% in Q4, seasonally adjusted, and was up 4.3% from Q1 2022 not seasonally adjusted. In service-providing industries, total compensation increased 1.1% in Q1, slightly less than 1.2% in Q4 and was up 4.9% over Q1 2022.
The employment cost index measures the change in the cost of labor, free from the influence of employment shifts, across occupations and industries. It is provided by the Bureau of Labor Statistics and is available in Haver’s USECON database. Consensus estimates from the Action Economics survey are in Haver’s AS1REPNA database.
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.
