US Employment Costs Continue to Slow to Pre-Pandemic Levels
Today everyone’s attention is on the FOMC meeting in the evening, with traders curious whether the FED will sound more dovish or less so. However, we have still more economic figures coming out of the US ahead of the FOMC. Just a while ago we had the ADP employment and the labour cost index, both of which came on the weaker side.
While the FED has alredy taken the decision of what it wants to do and how it wants it to sound, employment earnings are weakening, which will have an impact on the upcoming meetings. The ADP employment came around 40k below expectations, while Compensation costs for civilian workers increased 0.9% during Q3 of 2023, the U.S. Bureau of Labor Statistics reported today.
Wages and salaries increased 0.9% and benefit costs increased 0.7 percent from September 2023. Compensation costs for civilian workers increased 4.2% during 2023 and increased 5.15% in December 2022. Wages and salaries increased 4.3% for the 12-month period ending in December
US Employment Cost Index Report for the 4Q of 2023
- Overall Employment Cost Index for Q4:
- Actual: 0.9%
- Expected: 1.0%
- Previous Quarter: 1.1%
- Note: This represents the percentage change in the cost of labor for businesses.
- Wages for Q4:
- Actual: 0.9%
- Previous Quarter: 1.2%
- Note: This refers to the percentage change in wages, reflecting the cost of employee labor.
- Benefits for Q4:
- Actual: 0.7%
- Previous Quarter: 0.9%
- Note: This represents the percentage change in the cost of employee benefits.
These figures indicate a moderation in the Employment Cost Index for the fourth quarter of 2023 compared to the previous quarter. The ECI provides insights into changes in labor costs, encompassing both wages and benefits. Inflation is benefiting from overall declines. However, prior to Covid, the data was primarily below the 1.0% level. So, although being lower, it remains close to pre-Covid highs.
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