Employment Benefits QoQ

Employment Benefits QoQ is the benefits leg of the Employment Cost Index (ECI), a gauge of hourly labor-cost change. The headline is the seasonally adjusted 3-month percent change in employer benefit costs. Its fixed job basket keeps shifts of workers between occupations and industries from distorting it. It is not average earnings, take-home pay, or a pay level.

The index began in 1975, with benefits added around 1980, and it is published by the Bureau of Labor Statistics (BLS). It is built from the National Compensation Survey (NCS), an establishment survey. It covers civilian workers in all 50 states and the District of Columbia: private industry plus state and local government. It is a Principal Federal Economic Indicator (PFEI).

The sample holds about 23,100 occupational observations from about 5,500 private establishments and about 7,400 from about 1,400 government establishments. It excludes federal workers, the self-employed, farm workers, and US territories, and it produces no state-level estimates. Policymakers use it to assess benefit costs and set monetary policy.

Costs cover the pay period including the 12th of March, June, September, and December. Releases come in January, April, July, and October, about 1 month after each quarter ends, at 8:30 a.m. ET.

Each release brings a summary, data tables, and a technical note. Table 1 covers total compensation, Table 2 covers wages and salaries, and Table 3 covers benefits. Table 12 details benefits by occupation, industry, and bargaining status. Dollar cost levels are not in this release; they appear in the separate Employer Costs for Employee Compensation (ECEC) release.

Not seasonally adjusted data are final, while adjusted data are revised for 5 years each year, with factors published each March. Fixed employment weights are updated every several years. Historical tables and a public database tool are updated with it.

Benefits span five employer-paid parts that can move differently than wages. There is no preset threshold: a positive reading means costs rose, and a larger reading means faster growth.

• Paid leave: vacation, holiday, sick, and personal leave.
• Supplemental pay: overtime premiums, shift differentials, and nonproduction bonuses outside base rates.
• Insurance: employer-paid life, health, and short- and long-term disability premiums.
• Retirement and savings: employer funding for defined benefit and defined contribution plans.
• Legally required benefits: Social Security, Medicare, unemployment insurance, and workers compensation.

In the quarter ending June 2022 (released July 29, 2022), civilian compensation rose 1.3%; wages rose 1.4% and benefits 1.2% after seasonal adjustment. In the 12 months ending June 2022, compensation rose 5.1%, wages 5.3%, and benefits 4.8%, not seasonally adjusted. Private benefits rose 5.3% and state and local benefits 3.6%. Yet inflation-adjusted private benefit costs fell 3.5%, so strong nominal growth hid a real loss.

1. Matched quotes: In each cell, hourly benefit costs of jobs reporting in both quarters are averaged with sample weights, tracking jobs, not workers.
2. Cell change: The cell ratio divides this quarter average by last quarter average and compounds it onto the running change. For example, 1.600 times 1.012 equals 1.6192.
3. Benefit bill: The running change is scaled by the base-period benefit bill; for example, 700 times 1.6192 equals 1,133.44.
4. Modified Laspeyres index: Current benefit bills are summed and divided by base-period bills times 100, with December 2005 set to 100. Employment weights from Occupational Employment and Wage Statistics (OEWS) stay fixed until the next reweight.
5. Link relative: The quarterly change equals the index now divided by the index last quarter minus 1 times 100. It is seasonally adjusted; the 12-month change is not. For example, 158.614 divided by 157.000 minus 1 times 100 is about 1.0%.
6. Seasonal adjustment and real dollars: X-13ARIMA-SEATS divides low-level indexes by seasonal factors and sums higher aggregates with weights. Real values divide the index by rebased CPI-U; for example, 149.6 divided by 1.461 is about 102.4.