Employment Cost Index (ECI) Source: Department of Labor Frequency: Quarterly Availability: Three to four weeks following the reported quarter Possible Impact on Interest Rates: Larger-than-expected increase or increasing trend is considered inflationary, causing bond prices to drop and yields and interest rates to rise.
Current Data Reported April 28, 2000: The first quarter employment cost index (ECI) surged to 1.4%--the largest increase in ten years. The benefits component jumped a strong 2% for the quarter, bringing the annual growth rate to 5%. Wages and salaries rose a more modest 1.1% last quarter, which leaves the annual growth rate at 4%. See "Overview" below for more information. Overview: The Employment Cost Index (ECI) measures the growth of compensation (wages and benefits). The index is based on a fixed group of occupations. The ECI is not particularly timely as it is published quarterly. However, it is considered to be an excellent indicator of compensation trends--superior to the earnings data included in the monthly employment report, as the ECI considers changes in benefits costs as well as compensation. A strong report is bad news for the bond market, causing the bond to slump. Likewise, a weak report is viewed positively by investors.
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