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Employment Costs Rose 0.3 Percent in First Quarter

April 30, 2013

Staff Reports --

employment costs

The employment cost index rose 0.3 percent in the three-month period ending in March 2013, the Bureau of Labor Statistics reported Tuesday, but an error in the benefits data may have skewed the results.

The index measuring the cost of labor in the U.S. was essentially unchanged compared to the 0.4 percent increase in the prior quarter, while wages and salaries were up 0.5 percent compared to 0.3 percent in the period ending in December 2012.

In the civilian sector, the cost of compensation rose 1.8 percent compared to 1.9 percent in the period prior. The increase for the first quarter in 2012 was 1.7 percent. Benefit costs increased 1.9 percent in the first quarter, down from 2.7 percent in the first quarter of 2012.

The cost of compensation among private industry workers was less than 2 percent, ranging from 1.6 percent for sales and office workers to 1.9 percent for people in construction and maintenance. Costs in the leisure and information sectors rose 0.9 percent and 2.2 percent respectively.

In state and local governments, compensation costs were up 1.9 percent while wages and salaries drifted up by 1 percent in the first quarter, the same figure as the first quarter of 2012. Benefit costs were up 3.5 percent, however, compared to 2.3 percent a year ago.

The error was in data primarily affecting private industry benefits for sales and office occupations, the BLS reported. Benefits estimates for March 2013 have been suppressed temporarily. Corrected data will be available at the BLS website.

The rise in the ECI was the lowest since 1999 and is probably understated because of the data errors, according to MarketWatch.

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