2011 Economic Calendar
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Employment Cost Index  
Released On 7/29/2011 7:30:00 AM For Q2, 2011
 PriorConsensusConsensus RangeActual
ECI - Q/Q change0.6 %0.5 %0.4 % to 0.6 %0.7 %
ECI - Y/Y change2.0 %2.2 %

Increasing acceleration in benefit costs fed an outsized 0.7 percent second-quarter increase in the employment cost index, the largest increase of the recovery. Benefits, which make up 30 percent of the index, rose 1.3 percent on top of the first-quarter's 1.1 percent jump with wages & salaries, which make up the remaining 70 percent, showing no acceleration at plus 0.4 percent.

When stripping out government workers and looking at just the private sector, benefits rose a quarterly 1.6 percent vs 1.2 percent in the first quarter with wages & salaries showing incremental acceleration at plus 0.5 percent. Add these two together and total compensation in the private sector -- and this is a special sign of increasing pressure -- rose 0.8 percent vs 0.5 percent gains in the prior two quarters.

Year-on-year rates tell the same story with benefits up 3.6 percent vs 3.0 percent in the first quarter and wages & salaries unchanged at plus 1.6 percent. These readings are for both government and private workers combined. Total year-on-year compensation is up 2.2 percent from 2.0 percent in the first quarter. A look at just the private sector shows an outsized three tenths increase in the year-on-year rate to plus 2.3 percent.

If the economy were in a solid growth mode these results would definitely be a concern for Federal Reserve policy makers who keep a close eye on compensation and often comment in detail about benefit costs. But the economy, based if nothing else on this morning's accompanying release of GDP data, isn't in a solid growth mode, making these early signs of compensation inflation a distant secondary concern.

Consensus Outlook
The employment cost index rose a quarterly 0.6 percent in the first quarter versus a run of 0.4 percent gains in prior quarters. Year-on-year, the ECI is up 2.0 percent for no change compared to the fourth quarter. Wages rose 0.4 percent, the same pace as the fourth quarter, and are up only 1.6 percent year on year. Benefits jumped 1.1 percent for a 3.0 percent year-on-year increase with health benefits for employers up 3.4 percent.

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
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


2011 Released Schedule
Released On: 1/284/297/2910/28
Release For: Q4Q1Q2Q3

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