U.S. Modest Uptick in Employment Cost Index Advance in Q3
Summary
- Wages and salaries up 1.2% in Q3, firmer that Q2 increase.
- Benefits increase 0.9%, repeating Q2 gain.
- Goods-producing industries have steady quarterly increase, services industries compensation firmer in Q3.
The employment cost index (ECI) rose 1.1% seasonally adjusted in Q3, up from 1.0% in Q2, according to Bureau of Labor Statistics data for civilian workers. The Action Economics Forecast Survey looked for a 1.0% increase in Q3. Compared to a year ago, the ECI was up 4.3% in Q3 (not seasonally adjusted), a modest slowing from 4.5% in Q2, and the least strong since the 4.0% in Q4 2021.
Wages and salaries for civilian workers rose 1.2% in Q3, up from 1.0% in Q2. The Q3 amount was up 4.6% from a year ago, not seasonally adjusted, the same yearly increase as in Q2; these are also the least since Q4 2021. Benefits rose 0.9% in Q3, the same as in Q2; they were up 4.1% from a year ago, down from 4.2% in Q2 and the least since the same as in Q1 2022.
Private industry workers’ compensation rose 1.0% in Q3, seasonally adjusted, the same as in Q2, which was the smallest quarterly increase since Q2 2021. The 4-quarter increase in Q2 2023 was 4.3%, down from 4.5% in Q2 and the smallest year/year advance since 4.1% in Q3 2021. Wages and salaries for private industry workers increased 1.1% in Q3, up from 1.0% in Q2 and up 4.5% from Q3 2022, the latter not seasonally adjusted. The Q3 increase, year-over-year, is also the least since 3.5% in Q2 2021. Benefits for private industry workers rose 0.8% in Q3, down from 0.9% in Q2 and the smallest since 0.4% in Q2 2021. Year-over-year, benefits were up 3.9% in Q3, not seasonally adjusted, the same 4-quarter increase as in Q2 and the smallest since 2.9% in Q4 2021.
By industry sector, total compensation in goods-producing industries rose 0.8% in Q3 2023, seasonally adjusted, the same as in Q2 and the least quarterly amount since 0.6% in Q1 2021; the Q3 amount was up 3.8% year-on-year, not seasonally adjusted. In service-producing industries, total compensation increased 1.1% in Q3, up from 1.0% in Q2 and 4.4% from a year ago.
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 Forecast 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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