| Employment Cost Index |
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Released On 1/28/2011 8:30:00 AM For Q4, 2010
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Prior | Actual |
| ECI - Q/Q change | 0.4 % | 0.4 % | | ECI - Y/Y change | 1.9 % | 2.0 % |
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Highlights
Wage inflation is no threat to accommodation by the Federal Reserve which closely watches the employment cost index. The ECI rose a very mild and lower-than-expected 0.4 percent in the fourth quarter compared with the third quarter. Compared with fourth quarter 2009, the ECI rose 2.0 percent for the second lowest year-on-year fourth-quarter reading ever. The lowest reading ever was plus 1.4 percent in fourth-quarter 2009.
Details show 0.4 percent increases across the board for both wages & salaries and for benefits in both the civilian-worker and private-industry breakdowns. It was not, to say the least, a big pay-raise year for the American worker whose wages & salaries rose only 1.6 percent. This is the second lowest reading ever behind fourth-quarter 2009's plus 1.5 percent. Workers did get a bit bigger boost of 2.9 percent on the benefit side.
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Definition
A measure of total employee compensation costs, including wages and salaries as well as benefits. The employment cost index (ECI) is the broadest measure of labor costs.
Why Investors Care
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![[Chart]](showimage.asp?imageid=20323)
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The employment cost index measured total compensation costs which include wages and salaries and also benefits. Benefits include vacations, but the primary mover is health insurance premiums.
Data Source: Haver Analytics
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