Us Employment Cost Index-june 2007

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[B]EMPLOYMENT COST INDEX-JUNE 2007

Total compensation costs for civilian workers increased 0.9 percent from March to
June 2007, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department
of Labor reported today. This was about the same as the 0.8 percent increase for
the December 2006 to March 2007 period. Wages and salaries rose 0.8 percent from March
to June 2007, compared with 1.1 percent for the previous quarter. Benefit costs
increased 1.3 percent, up from 0.1 percent during the previous three-month period.
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 civilian workers (nonfarm private industry
and state and local government).

Wage and salary costs, which account for 70 percent of total civilian compensation
costs, were responsible for 63 percent of the increase in compensation costs for
this quarter. In state and local government, wages and salaries make up 67 percent
of total compensation but were responsible for only 47 percent of the increase in
compensation. Benefit increases in state and local government accounted for a larger
portion of the change this quarter due primarily to increases in defined benefit
retirement plans and health benefits.

Quarterly changes, seasonally adjusted

For private industry, compensation costs rose 0.9 percent from March to June 2007,
compared to 0.6 percent for the prior quarter, while state and local government costs
increased 1.1 percent, compared to 1.3 percent for the quarter ended March 2007.
(See tables A and 1.)


Table A. 3-month percent changes in the Employment Cost Index, seasonally adjusted
Sep. Dec. Mar. June Sep. Dec. Mar. June
Compensation component 2005 2005 2006 2006 2006 2006 2007 2007
Civilian workers
Compensation costs 0.7 0.8 0.6 0.9 0.9 0.9 0.8 0.9
Wages and salaries 0.6 0.7 0.7 0.9 0.9 0.7 1.1 0.8
Benefit costs 1.0 0.8 0.6 0.9 1.0 1.1 0.1 1.3
Private industry
Compensation costs 0.7 0.6 0.7 0.8 0.9 0.8 0.6 0.9
Wages and salaries 0.6 0.7 0.7 0.8 0.8 0.8 1.1 0.8
Benefit costs 0.8 0.7 0.5 0.7 1.0 0.9 -0.3 1.1
State and local government
Compensation costs 0.9 1.1 0.7 1.0 1.3 1.0 1.3 1.1
Wages and salaries 0.5 1.0 0.5 0.9 1.3 0.8 0.9 0.8
Benefit costs 1.5 1.3 1.1 1.3 1.4 1.4 2.1 1.7


Wages and salaries for private industry workers increased 0.8 percent, compared
with 1.1 percent for the previous quarter. In state and local government, the increase
was 0.8 percent, compared with 0.9 percent in the prior quarter. (See tables A and 2.)

Benefit costs for private industry rose sharply by 1.1 percent, compared to a decline
of 0.3 percent the previous quarter. For state and local government, benefit costs
increased 1.7 percent, compared to 2.1 percent in the previous quarter. (See tables A and 3.)

Over-the-year changes, not seasonally adjusted

Annual compensation costs for civilian workers increased 3.3 percent for the year
ended June 2007, compared with a 3.0 percent increase for the year ended June 2006. In
private industry, compensation costs rose 3.1 percent in the year ended June 2007.
In June 2006, the increase was 2.8 percent. For state and local government, the yearly
increase for June 2007 was 4.8 percent, higher than the June 2006 increase of 3.8 percent.

The components of compensation differed in their rate of change. While increases
in wages and salaries for civilian workers accelerated, benefit cost increases stayed
the same. Wages and salaries rose 3.4 percent for civilian workers for the year
ended June 2007, greater than the 2.8 percent gain for June 2006. Despite remaining
the same for civilian workers at 3.4 percent, benefit cost increases differed significantly
between private industry and state and local government. Private industry benefits
increased 2.6 percent, about the same as the 2.7 percent increase in June 2006, while
state and local government benefits rose 6.6 percent, up from 5.5 percent.
(See tables B, 8, and 12.)

Nonfarm private industry

For the year ended June 2007, compensation costs increased 2.6 percent for
goods-producing industries, compared to a 2.3 percent increase in June 2006. Compensation
cost increases for manufacturing remained low, at 1.9 percent for the year ended
June 2007, the same for the year ended June 2006. Compensation costs for the construction
industry rose 3.9 percent, compared to 3.5 percent for the previous year. (See table 5.)


Table B. 12-month percent changes in the Employment Cost Index, not seasonally adjusted
June June June June June June
Compensation component 2002 2003 2004 2005 2006 2007
Civilian workers
Compensation costs 3.7 3.7 3.8 3.2 3.0 3.3
Wages and salaries 3.5 2.7 2.6 2.5 2.8 3.4
Benefit costs 4.7 5.9 7.1 5.0 3.4 3.4
Private industry
Compensation costs 4.0 3.5 3.9 3.1 2.8 3.1
Wages and salaries 3.6 2.6 2.7 2.5 2.8 3.3
Benefit costs 4.8 5.8 7.3 4.7 2.7 2.6
State and local government government
Compensation costs 3.4 4.3 3.5 3.5 3.8 4.8
Wages and salaries 3.2 3.1 2.1 2.3 3.1 3.8
Benefit costs 4.6 6.8 6.6 6.3 5.5 6.6


The over-the-year increase for June 2007 in compensation costs for service-providing
industries was 3.3 percent. In June 2006, the increase was 2.9 percent. Among the
major industries, compensation gains ranged from 2.8 percent in financial activities and
the trade, transportation, and utilities industries to 4.6 percent in the leisure and
hospitality industry. (See table 5.)

Among private industry occupational groups, over-the-year compensation gains ranged
from 2.2 percent for production, transportation, and material moving to 3.6 percent for
service occupations. (See table 5.)

Compensation costs for union workers advanced 2.1 percent for the year ended June 2007.
This was outpaced by nonunion workers, which increased 3.3 percent for the same 12-month
period. Wages and salaries for union workers increased 2.5 percent for the 12-month period
ended June 2007, less than that for nonunion workers, which rose 3.4 percent. Benefit
costs for union workers rose 1.4 percent for the 12-month period, which were also less
than benefit cost increases for nonunion workers, which rose 2.8 percent.
(See tables C, 6, 10, and 12.)


Table C. 12-month percent changes in the Employment Cost Index, private industry
workers, by bargaining status, not seasonally adjusted
June June June June June June
Compensation component 2002 2003 2004 2005 2006 2007
Union workers
Compensation costs 4.3 4.9 5.7 3.0 3.0 2.1
Wages and salaries 4.2 3.0 2.8 2.4 2.5 2.5
Benefit costs 4.8 8.1 10.9 4.1 3.8 1.4
Nonunion workers
Compensation costs 3.8 3.2 3.7 3.1 2.8 3.3
Wages and salaries 3.5 2.5 2.7 2.5 2.9 3.4
Benefit costs 4.7 5.3 6.4 4.8 2.5 2.8


State and local government

For the year ended June 2007, wages and salaries for state and local government
workers rose 3.8 percent compared to 3.1 percent a year ago. For benefits, costs
increased 6.6 percent compared to 5.5 percent for the previous year. Hospitals had
the largest increase in wages and salaries, rising to 5.0 percent from 2.8 percent a year
earlier. Public administration wages and salaries increased 4.1 percent, up from
2.8 percent while education services wages and salaries increased 3.5 percent compared
to 3.0 percent the year earlier. (See tables B, 11, and 12.)

Over-the-year changes in wages and salaries, constant dollars, not seasonally adjusted

After adjusting for the changes in the prices of consumer goods and services, wages
and salaries for civilian workers increased 0.7 percent for the 12-month period ended
June 2007, compared to a decrease of 1.3 percent for the 12-month period ending June 2006.
The private industry increase was 0.7 percent compared to a decrease of 1.5 percent for
the year ending June 2006. State and local government registered a 1.0 percent increase,
compared to a decrease of 1.2 percent for the previous year. (See table D.)