Employment Cost Index QoQ

The Employment Cost Index (ECI) measures quarterly change in hourly labor cost to employers in the United States. It is published by the Bureau of Labor Statistics (BLS), a United States labor agency, as a Principal Federal Economic Indicator. It comes from the National Compensation Survey (NCS), an employer pay survey, and tracks a fixed basket of jobs. The basket holds occupation and industry mix constant for pure cost change, free from employment shifts.

Coverage spans private industry and state and local government workers nationally, excluding federal and self employed workers. Agriculture, private households, volunteers, unpaid workers and workers abroad sit outside scope, with no state index produced. Results appear as an index with base value 100, plus 3-month and 12-month percent changes in nominal and inflation adjusted terms. An index value of 110 means a 10% rise since the base period, so change reads as percent, not points.

It is not average earnings, not a consumer price gauge such as the Consumer Price Index (CPI), and not dollar pay levels. Dollar levels with moving weights sit in a separate Employer Costs for Employee Compensation (ECEC) release.

Pay data reflect a fixed reference pay period in each quarter. Results appear about 1 month after each quarter ends, in the morning under embargo at 8:30 Eastern Time. Each release carries summary text, data tables with index values plus 3-month and 12-month percent changes, charts and a technical note. Dollar pay levels sit outside this release in the separate Employer Costs for Employee Compensation (ECEC) release.

Estimates stand as final on publication, with correction only for genuine errors. Seasonal series face revision once a year for the prior 5 years, with fresh factors set for the year ahead. The publisher states no threshold and no trading rule, directing readers to percent change for contracts, pay talks and monetary policy. Listed uses span pay adjustment, provider reimbursement, contract escalation, bargaining and policy formulation.

Headline pay growth splits into wages and benefits, and detailed groups seldom move together.

• Total compensation: the full hourly cost for civilian workers, by occupation, industry, bargaining status and area.
• Wages and salaries, 70%: regular pay for work done, with incentives, living cost extras, hazard pay and deferrals.
• Benefits, 30%: employer cost for 18 items in 5 groups covering leave, supplemental pay, insurance, retirement and legally required payments.
• Health benefits: the private health insurance cost series, with fewer observations so shifts in replies and cost sharing can swing it.

Splits by ownership, occupation, industry, bargaining status and area aid analysis, while selected series use varying weights and are not strictly comparable to headline aggregates. Wage details separate incentive pay inside wages from shift, overtime and nonproduction bonuses inside benefits.

The index follows a modified Laspeyres formula with frozen job weights across 765 narrow occupation by industry cells. Each cell compares pay from matched jobs reporting in both the reference quarter and the previous quarter. Weights adjust for nonresponse, impute missing items, and benchmark to base employment, with wages required for any usable quote. Each cell bill multiplies average pay by a fixed worker count, then accumulates moves multiplicatively since the bill period.

The index divides summed present bills by summed bill period bills times 100, with base value 100. For example, base bills of 25.0 and 20.0 sum to 45.0, while present bills of 25.5 and 20.2 sum to 45.7. That ratio gives (45.7/45.0) x 100 = 101.6, rounded to one decimal place. The quarterly move divides the reference quarter index by the previous quarter index as [(102.3/101.6)-1]x100, giving 0.7%.

Low level series use direct seasonal smoothing, while high aggregates combine adjusted parts, with 5 year revisions for seasonal series. Inflation adjusted form divides the nominal index by consumer prices, and rounding can place an aggregate outside its parts. Key point: the quarterly percent is not the raise any worker got and not inflation. It holds job mix fixed with matched jobs, so moving weight averages can diverge from it.