The fourth quarter’s rise was down from the 1.0% increase notched in the previous three month period (See Employment Cost Continue to Rise in Q3 ). For the year, employment costs rose 3.8%, up from a 3.4% gain in 2002, according to a release of data from the US Department of Labor (DoL).
Wall Street analysts polled by Reuters had been expecting a 0.9% rise in costs during the fourth quarter.
Broken out by individual components, benefits costs increased 1.2% and continued to outpace the 0.5% gain in wages and salaries for civilian workers. Overall, employer costs for benefits account for over a third of compensation costs and include such items as health and other insurance, retirement plans, paid leave, and legally required benefits like Social Security.
The ECI is a component of the National Compensation Survey and measures changes in compensation costs, which include wages, salaries, and employer costs for employee benefits.