December 1995 Employment Cost Index

Historical release narrative reproduced from the official public-domain source. Statistical tables, standard technical appendices, administrative material and attendance rosters are omitted; formatting is adapted for reading. Figures retain the release's historical context and may have been revised. Consult the linked source for the complete document.

The Employment Cost Index (ECI) increased 0.6 percent before seasonal adjustment in the 3 months ended in December 1995, the U.S. Department of Labor's Bureau of Labor Statistics reported today. The December 1995 ECI level of 127.4 (June 1989=100) was 2.9 percent higher than the index in December 1994. The ECI measures changes in compensation costs, including wages, salaries, and employer costs for employee benefits.

Quarterly changes, seasonally adjusted

On a seasonally adjusted basis, the ECI rose 0.9 percent in the September-December 1995 period, compared with a 0.6 percent gain in the June-September 1995 period. The acceleration was due to benefits. Wages and salaries rose 0.7 percent, the same as in the June-September period, and in line with increases over the past 3 years. Benefit costs, in contrast, rose 1.3 percent, the largest gain since March 1993. A reversal in the trend of declining increases in health insurance costs, as well as gains in nonproduction bonuses, contributed to the faster rate of benefit-cost increase.

Seasonally adjusted 3-months ended Unadjusted Compensation ------------------------------------------------- 12-months component Mar. June Sep. Dec. Mar. June Sep. Dec. ended 1994 1994 1994 1994 1995 1995 1995 1995 Dec. 1995

The recent shutdown of many federal agencies, including the Bureau of Labor Statistics, forced a delay in the updating of seasonal factors to be used in 1996 and the annual revisions in the seasonally adjusted ECI data. The new seasonal factors, and the revised seasonally adjusted data for the past 5 years, will be introduced in the March 1996 ECI release.

Over-the-year changes, unadjusted

Compensation costs (not seasonally adjusted) increased 2.9 percent for the year ended in December 1995, about the same as the gain for the year ended in December 1994. (See table 2.) Wage and salary increases also were about the same in the two periods (2.9 and 2.8 percent, respectively), while benefit cost gains slowed (2.8 percent, down from 3.4 percent). The following table shows the pattern of annual changes since 1987.

Percent change, 12 months ended in December

A slowdown in compensation cost increases was evident for private industry (2.8 percent for December 1994-95, down from 3.1 percent for December 1993-94), but not for state and local governments (3.0 percent for both periods). For private industry workers, wage and salary gains were the same for the two periods (2.8 percent), but benefit cost increases declined (2.7 percent in December 1994-95, down from 3.7 percent).

For the year ended December 1995, compensation cost gains in private industry were higher in service-producing industries (3.0 percent) than in goods-producing industries (2.5 percent). For the previous year ended December 1994, increases in the goods-producing sector had been the higher of the two (3.1 percent compared with 2.9 percent). Among the goods-producing industries, the December 1994-95 increases ranged from 2.2 percent in construction to 2.6 percent in manufacturing. In the service-producing industries, gains ranged from 2.0 percent for general merchandise stores to 5.4 percent for colleges and universities. Other service-producing industries with relatively large increases were transportation (4.5 percent) and wholesale trade (4.4 percent).

Over-the-year compensation cost increases in private industry were higher for white-collar workers (3.1 percent) than for blue-collar workers (2.5 percent) and service occupations (2.0 percent). Among white-collar occupations, increases ranged from 2.8 percent for profes sional specialty and technical workers to 3.3 percent for administrative support including clerical occupations. Among blue-collar occupations, the gains ranged from 2.3 percent for machine operators, assemblers, and inspectors to 3.3 percent for handlers, equipment cleaners, helpers, and laborers.

Compensation cost increases were slightly higher for union workers (3.0 percent) than for nonunion workers (2.8 percent). This pattern also held in the service-producing industries (3.7 percent and 2.9 percent, respectively), but not in the goods-producing industries (2.6 percent for nonunion and 2.2 percent for union).

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