U.S. employment costs rise 0.7% in first quarter
WASHINGTON (MarketWatch) -- The cost of employing a U.S. worker rose at a slower rate in the first quarter, the Labor Department reported Wednesday, thanks to weaker growth in benefit costs.
Overall employment costs rose by 0.7% in the first quarter, falling back from a 0.8% gain in the prior three-month period. It was just under analysts' expectations. Economists surveyed by MarketWatch were expecting the employment cost index to rise by 0.8% in the first quarter. See Economic Calendar.
In the first quarter, wage and salary costs rose by 0.8%, government data show. It's the fourth consecutive quarter of 0.8% growth.
Benefit costs, however, grew at a weaker pace in the first quarter. They increased by 0.6% compared to 0.8% in the fourth quarter of 2007.
Over the past year, U.S. employment costs have risen 3.3%.
The employment costs data is some of the last to be released before the conclusion of the Federal Reserve's two-day meeting on interest rates. However, the Fed is more concerned about food and energy costs than it is about labor costs.
Most economists expect a modest quarter-percentage point cut from the central bank. The rate cut would bring the Fed's target for overnight interest rates to 2%, the lowest level since December 2004. See full story.
An announcement from the Fed is expected at around 2:15 p.m. Eastern Wednesday.
Employment costs grew by an unrevised 0.8% in the fourth quarter of 2007.
The employment costs index is a broader measure of compensation costs than the separate series of data on average hourly wages, which cover only about 80% of U.S. workers.
Economists say the ECI is a better measure of labor costs because the average hourly earnings data is tilted towards specialized workers. The ECI covers more workers than the average hourly earnings series and covers a greater range of compensation costs, including fringe benefits, bonuses and perks. End of Story
Robert Schroeder is a reporter for MarketWatch in Washington.
Overall employment costs rose by 0.7% in the first quarter, falling back from a 0.8% gain in the prior three-month period. It was just under analysts' expectations. Economists surveyed by MarketWatch were expecting the employment cost index to rise by 0.8% in the first quarter. See Economic Calendar.
In the first quarter, wage and salary costs rose by 0.8%, government data show. It's the fourth consecutive quarter of 0.8% growth.
Benefit costs, however, grew at a weaker pace in the first quarter. They increased by 0.6% compared to 0.8% in the fourth quarter of 2007.
Over the past year, U.S. employment costs have risen 3.3%.
The employment costs data is some of the last to be released before the conclusion of the Federal Reserve's two-day meeting on interest rates. However, the Fed is more concerned about food and energy costs than it is about labor costs.
Most economists expect a modest quarter-percentage point cut from the central bank. The rate cut would bring the Fed's target for overnight interest rates to 2%, the lowest level since December 2004. See full story.
An announcement from the Fed is expected at around 2:15 p.m. Eastern Wednesday.
Employment costs grew by an unrevised 0.8% in the fourth quarter of 2007.
The employment costs index is a broader measure of compensation costs than the separate series of data on average hourly wages, which cover only about 80% of U.S. workers.
Economists say the ECI is a better measure of labor costs because the average hourly earnings data is tilted towards specialized workers. The ECI covers more workers than the average hourly earnings series and covers a greater range of compensation costs, including fringe benefits, bonuses and perks. End of Story
Robert Schroeder is a reporter for MarketWatch in Washington.
Labels: employment, USA
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