June to September Comp Costs Increases Lower Than Last Quarter

October 29, 2004 (PLANSPONSOR.com) - Although the cost of employee benefits and compensation expenses continued to rise, the rate of increase eased off slightly during the third quarter.

The US Department of Labor’s Bureau of Labor Statistics (BLS) reported that compensation costs for civilian workers rose 0.9% from June to September, the same as the previous quarter (See March to June Comp Costs Moderate ). Benefits expenses continued to eat up more dollars, but the 1.1% increase was the smallest seen this year. Firms did however see a 0.7% increase in wages and salaries, up 0.1% from last quarter.

Compensation costs for the private sector rose 0.9% in the third quarter, down 0.1% from last quarter. For state and local government workers, compensation costs increased only 0.5%, small when compared to the 1.1% gain seen last quarter.

Meanwhile, benefits costs increased 1.1% for civilian workers (nonfarm private industry and state and local government), down from 1.8% last quarter. Private sector benefits rose 1%, significantly down from 1.7% in the preceding quarter. Benefit costs for state and local governments were up 1.4%, although this rate of increase was lower than the 1.9% seen from March to June.

The Employment Cost Index (ECI), a component of the National Compensation Survey, measures quarterly changes in compensation costs, which include wages, salaries, and employer costs for employee benefits for nonfarm private and state and local government workers.