U.S. Employment Cost Index
Chart of the Week for May 20, 2016 - May 26, 2016
On a quarterly basis, the Bureau of Labor Statistics produces the Employment Cost Index ("Cost Index") which details the changes in the costs of civilian labor in the U.S. Economy. Wages and Salaries generally make up 70% of the cost and benefits generally make up 30% of the cost. The Cost Index is an indicator monitored by the U.S. Federal Reserve Board, and is a component of how the U.S. Government determines salary adjustments for federal employees.
As the chart indicates, the Cost Index has increased every quarter since the second quarter of 2011 on a seasonally adjusted basis, with a 9.9% cumulative increase over that time period. For the twelve-month period ended March 2016, the Cost Index increased 1.9%, compared to a 2.6% increase in the twelve-month period ending March 2015. While the Cost Index value has been increasing, some economists have noted the growth rate declining. "Recent employment-cost index readings have been weaker than expected given the relatively low unemployment rate", according to J.P. Morgan Chase Chief Economist Daniel Silver. Lower employment cost helps control inflation but may limit economic growth.
Posted by: sarah_oz@yahoo.com
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