Longview: ECI

You might think a sub-4% unemployment rate would be nudging the employment cost index (ECI) higher, but it’s not.

In the first quarter, private sector compensation costs were 2.7% at an annual rate and were also up 2.7% for the year. That yearly gain was the lowest since the end of 2017. The softening was led by benefits, up 2.1% in the quarter and 2.4% for the year. Wage growth accelerated some, but still isn’t much above where it was at previous lows on the graph. And growth in overall compensation costs is also around the level of earlier lows. Wages remain the dog that didn’t bark.