December 2001 Employment Cost Index

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The Employment Cost Index (not seasonally adjusted) for December 2001 was 156.8 (June 1989=100), an increase of 4.1 percent from December 2000, the U.S. Department of Labor's Bureau of Labor Statistics reported today. The Employment Cost Index (ECI), a component of the Bureau's National Compensation Survey, measures changes in compensation costs, which include wages, salaries, and employer costs for employee benefits.

Quarterly changes, seasonally adjusted

On a seasonally adjusted basis, the 3-month increase in compensation costs for civilian workers (nonfarm private industry plus State and local government) was 0.9 percent during the September-December 2001 period, following a gain of 1.0 percent in June-September 2001. Wages and salaries increased 0.8 percent during the December 2001 period, identical to the change in the previous 3-month period. Benefit costs rose 1.2 percent during the December 2001 quarter, falling from the 1.6 percent gain in the September 2001 quarter.

The 3-month increase in compensation costs for private industry workers was 1.0 percent during the September-December 2001 period, following an increase of 0.9 percent during the previous 3-month period. The gain in wages and salaries was 0.9 percent in the quarter ended in December; in the September quarter, it was 0.7 percent. Benefit costs showed a 3-month rise of 1.3 percent during the December 2001 quarter, compared with a 1.4 percent gain during the September 2001 quarter. The increase in benefit costs continued to be largely due to increases in employer costs for health insurance. (See tables A and 1.)

Compensation costs for State and local government workers increased 0.6 percent during the September-December 2001 period, falling significantly from the 1.4 percent increase in the June-September period. Wages and salaries rose 0.5 percent in the quarter ended in December, following a 1.0 percent increase the previous quarter. Benefit costs rose 0.6 percent during the December quarter, dropping sharply from the 2.4 percent gain in the September quarter. The slower increase in benefit costs was largely due to smaller increases in employer costs for health insurance and retirement benefits.

Over-the-year changes, not seasonally adjusted

Compensation costs for civilian workers (not seasonally adjusted) increased 4.1 percent for the 12 months ended in December 2001. This compares with over-the-year increases of 4.1 percent in December 2000 and 3.4 percent in December 1999. Compensation costs in private industry rose 4.2 percent in the year ended December 2001, compared with increases of 4.4 percent in December 2000 and 3.4 percent in December 1999. In State and local government, compensation costs increased 4.2 percent for the year ended December 2001; over-the-year increases were 3.0 percent in December 2000 and 3.4 percent in December 1999. (See tables B, 2, and 3.)

Nonfarm private industry

In private industry, wages and salaries rose 3.8 percent for the year ended December 2001, after increasing 3.9 percent in the year ended December 2000. (See tables B and 6.) Benefit costs for private industry workers increased 5.1 percent for the year ended in December 2001, compared with an increase of 5.6 percent in December 2000. (See chart A and tables B and 8.)

In private industry, over-the-year compensation cost increases were 4.2 percent for white-collar occupations, 3.8 percent for blue-collar occupations, and 4.5 percent for service occupations. Among the occupational groups, increases in compensation costs ranged from 3.2 percent for machine operators, assemblers, and inspectors to 4.8 percent for administrative support, including clerical workers. (See table 3.)

For the year ended December 2001, the compensation cost increase was 3.8 percent for goods-producing industries, compared with a 4.4 percent increase for the year ended December 2000. The over-the-year increase in compensation for service-producing industries was 4.3 percent, compared with a 4.4 percent increase for the year ended December 2000. Among service-producing industry divisions, December 2000-to-December 2001 increases ranged from 3.3 percent for wholesale trade to 6.1 percent for hospitals. (See table 3.)

Compensation costs for union workers rose 4.2 percent over the year, compared with a 4.1 percent increase for nonunion workers. In service- producing industries, union compensation increased 5.3 percent, greater than the 4.1 percent increase for nonunion workers. Conversely, in goods- producing industries, the increase for nonunion workers was 4.0 percent, compared with a 3.1 percent gain for union workers. Among the four geographic regions, increases in compensation costs ranged from 3.5 percent in the Midwest to 5.0 percent in the West. (See table 4.)

State and local government

In State and local government, the December 2001 over-the-year increase in wages and salaries was 3.6 percent, compared with a gain of 3.3 percent for December 2000. The 12-month gain in benefit costs for December 2001 was 5.5 percent, more than double the gain of 2.4 percent for December 2000. (See tables B, 5, and 8.)

The terrorist attacks of September 11 resulted in a tragic loss of lives and significant disruptions in the New York and Washington area economies, as well as disruptions to other businesses outside these directly impacted areas. A review of both the September and December survey responses was undertaken to evaluate the impact of the situation on the ECI survey cooperation rates by industry and any impact of nonresponse on survey estimates. No unusual effects were found. A fact sheet with additional information can be obtained from the Internet site http://www.bls.gov/ect/eciimpac.htm, by e-mail request ocltinfo@bls.gov, or by telephone (202) 691-6199.

ECI data are available on the Compensation Cost Trends page at http://www.bls.gov/ncs/ect/home.htm. To access data using Anonymous FTP, continue to use the Internet address ftp://ftp.bls.gov.

For technical assistance in using the BLS Internet site, send e-mail to webmaster@bls.gov. For ECI data requests, send e-mail to ocltinfo@bls.gov.

The ECI news release is available through an e-mail subscription service. See the subscription link on http://www.bls.gov/ncs/ect/home.htm or http://www.bls.gov/bls/newsrels.htm.

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