U.S. Employment Costs Advance 5.1% Over a Year Ago
Summary
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Wage & salaries are somewhat stronger in Q2.
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Benefits moderate in Q2 after Q1 surge.
The employment cost index (ECI) for civilian workers increased 1.3% in 2Q’22 after rising 1.4% in 1Q'22. This latest quarterly move produced 5.1% growth in employment costs over a year ago. This is the largest year/year advance since 3Q’1990. The Action Economics Forecast Survey expected a 1.2% quarterly gain.
Wages & salaries advanced 1.4% in Q2 (5.3% y/y), up from 1.2% in Q1. Benefits growth slowed to 1.2% in Q2 (4.8% y/y), but they had surged by 1.8% in Q1.
Private-sector compensation picked up to a 1.5% advance in Q2 (5.5% y/y) following 1.4% (4.8% y/y) in Q1. Wages & salaries in the private sector were up 1.6% in Q2, yielding an advance of 5.7% over a year ago. This followed a 1.3% quarterly rise in Q1. Benefit costs moderated somewhat in Q2, increasing 1.3% (5.3% y/y) following their 1.9% surge in Q1.
Compensation in goods-producing industries slowed somewhat in Q2, rising 1.2% (4.7% y/y) after 1.5% in Q1. Compensation in service-providing industries repeated its 1.4% Q1 advance in Q2 and that yielded a 5.2% rise over Q2’2021.
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.
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