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US: Employment Cost Index
| Consensus | Consensus Range | Actual | Previous | |
| Quarter over Quarter | 0.8% | 0.7% to 0.9% | 0.9% | 0.9% |
| Year over Year | 3.4% | 3.4% |
Highlights
The second quarter employment cost figures came in hotter than expected, fueled by an uptick in wages – although labor market conditions ae still looser compared to the same period a year ago.
Employment costs are up 0.9 percent in Q2, seasonally adjusted, matching the 0.9 percent rise in Q1 and beating the 0.8 percent increase expected in the Econoday survey of forecasters. On the year, costs are up 3.4 percent, the same as the 3.4 percent growth rate in Q1 and pointing to stability in employment cost increases.
For Q1, wages and salaries are up 0.9 percent, and benefit costs are up 1.0 percent, following increases of 0.8 percent and 1.2 percent, respectively in Q1. Wages and salaries for private sector workers rose 0.9 percent (vs. +0.7 percent in Q1) and benefit costs also increased 0.9 percent following a 1.3 percent jump in Q1.
Wages and salaries rose 3.2 percent for the 12-month period ending in June 2026. Benefit costs increased 3.6 percent. This compares to increases of 3.6 percent and 3.5 percent, respectively, for the 12-month period ending in June 2025.
Private sector wages and salaries are up 3.1 percent over the 12-month period (compared to +3.5 percent a year ago), while benefit costs rose 3.8 percent vs. a 3.4 percent rise in Q2 2025.
Market Consensus Before Announcement
ECI seen up 0.8 percent on quarter, a standard increase, versus 0.9 percent in Q1.
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.