| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Quarter over Quarter | 1.0% | 0.8% to 1.2% | 1.2% | 1.0% | 1.1% |
| Year over Year | 4.8% | 5.1% |
Highlights
Wage pressures remain highly elevated, up 1.2 percent for the employment cost index in the first quarter. The quarterly rate first broke over the 1 percent barrier in the third quarter of 2021 and has remained there since, peaking at 1.4 percent in the first quarter last year. The annual rate at least edged 3 tenths lower to a 4.8 percent level that, however, is well over the two percent line that generally describes the Federal Reserve's inflation goal.
The latest data are split evenly between 1.2 percent quarterly increases for both wages & salaries as well as benefits. These annual rates are 5.0 percent for the former and 4.5 pecent for the latter.
This report is very closely watched by Fed policy makers and today's results, which show more pressure than expected, will add to inflationary concerns and may well make another rate hike at next week's FOMC a done deal.
The latest data are split evenly between 1.2 percent quarterly increases for both wages & salaries as well as benefits. These annual rates are 5.0 percent for the former and 4.5 pecent for the latter.
This report is very closely watched by Fed policy makers and today's results, which show more pressure than expected, will add to inflationary concerns and may well make another rate hike at next week's FOMC a done deal.
Market Consensus Before Announcement
Enormously swollen gains of 1 percent and more over the last six quarters have been signaling substantial wage-push pressures. Forecasters see employment costs rising another 1.0 percent in the first quarter to match the fourth-quarter increase.
Definition
A measure of total employee compensation costs: wages and salaries as well as benefits. The employment cost index (ECI) is the broadest measure of labor costs.
Description
The employment cost index is an easy way to evaluate wage trends and the risk of wage inflation. Wage inflation is high on the Federal Reserve's enemy list. Fed officials are always on the lookout for the prospects of inflationary pressures. Wage pressures tend to percolate when economic activity is booming and the demand for labor is rising rapidly. During economic downturns, wage pressures tend to be subdued because labor demand is down.
By tracking labor costs, investors can gain a sense of whether businesses will feel the need to raise prices. If wage inflation threatens, it's a good bet that interest rates will rise, bond and stock prices will fall, and the only investors in a good mood will be the ones who tracked the employment cost index and adjusted their portfolios to anticipate these events.
By tracking labor costs, investors can gain a sense of whether businesses will feel the need to raise prices. If wage inflation threatens, it's a good bet that interest rates will rise, bond and stock prices will fall, and the only investors in a good mood will be the ones who tracked the employment cost index and adjusted their portfolios to anticipate these events.
