ICS Commentary - U.S. Employment Cost Index, Q2 2013

Download the ICS Commentary. (pdf)

Jointly, the most recent U.S. Bureau of Labor Statistics' quarterly Employment Cost Index (July 31, 2013) and monthly Employment Situation report (August 02, 2013) signal continuing steady recovery in the labor market, but at pace that's adding no heat to compensation costs.

"For a fourth quarter in a row, the Employment Cost Index reported compensation costs up 1.9 percent over the preceding 12 months. And, except for a couple of blips, this has been the situation for three years," says Linda Barrington, Executive Director of Cornell's Institute for Compensation Studies in the ILR School. "Rarely do you see such a flat-line in economic data," she added.
Wages and salaries in the private sector have been rising faster than in state and local governments, and variation is seen across private sector industries. Barrington points out that "the 12-month Employment Cost Index for wages and salaries remains below 1 percent in the Leisure and Hospitality sector, but above 2 percent in Financial Activities."

The Employment Cost Index (ECI) released July 31 by the U.S. Bureau of Labor Statistics reflects trends in the costs to employers for the wages and benefits they provide to their workers. The ECI is one of the labor market indicators used by the Federal Reserve Board to monitor the effects of fiscal and monetary policies and is released quarterly.

Read full ICS Commentary on Employment Cost Index. (pdf)