March to June Comp Costs Moderate

The US Department of Labor’s Bureau of Labor Statistics (BLS) reported that total compensation costs for civilian workers rose 0.9% in the March to June period, easing off the 1.1% pace seen in the December to March time frame. Benefits expenses continued to eat up more employer dollars with the cost of benefits up 1.8% while firms saw a 0.6% hike in wage and salary. Health insurance and DB retirement costs combined accounted for one-quarter of the rise in compensation costs for civilian workers.

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.

Compensation costs for the private sector rose 1% from March to June 2004, after advancing 1.1% in the prior quarter. After a strong gain of 1.8% in the March quarter, gains in the goods- producing industries moderated to 0.9% for the period ended June 2004. For state and local government workers, compensation costs increased 1.1% during the period, compared with a gain of 1% for the quarter ended in March.

Meanwhile, benefit costs increased 1.8% for civilian workers (nonfarm private industry and state and local government) in the June 2004 quarter, following a gain of 2.4% in the March 2004 quarter. Private sector benefit costs rose 1.7% for the June quarter, moderating from the 2.6% gain in the previous quarter. Benefit costs for state and local governments increased 1.9 % in the June quarter, following an increase of 1.7% in March 2004.

The data report is at ftp://ftp.bls.gov/pub/news.release/eci.txt .