Economic Calender: Employment Cost Idx 0.9%, Initial Claims 304K, APICS Survey 49.1%.
Details: briefing.com
Weekly Summary:
moneynet.com
Ideas Home Page: come.to
Tight labor market=higher labor costs:
cbs.marketwatch.com
WASHINGTON (CBS.MW) -- Tight labor markets are forcing companies to raise wages and benefits. The cost of keeping an employee on the payroll rose 0.9 percent in the second quarter, the Labor Department reported Thursday.
In private industry, wages rose 1 percent in the three months ending in June, while benefit costs rose 0.8 percent. For all civilian workers, wages rose 0.9 percent and benefits rose 0.8 percent.
The increases were in the upper range of expectations for the Employment Cost Index. See economic calendar.
In the past 12 months, the index has risen 3.5 percent, about 2 percentage points higher than the cost-of-living increases over that time. Unless labor productivity has filled the gap, companies are forced to pass on higher labor costs to their customers in higher prices or to their owners in lower profits.
Wages increases in the quarter were about in line with recent experience, but benefit costs have begun to shoot up after many quarters of moderate increases. Benefit costs rose just 0.4 percent in the first quarter of 1998 and have risen 2.6 percent in the past 12 months. In the past 12 months, wages have risen 4 percent.
In the second quarter, the ECI rose 1.3 percent in transportation and utilities. The index rose 1.2 percent in construction and finance, insurance and real estate. In the past 12 months, finance employment costs are up 7 percent and at banks, costs are up 10.4 percent.
Rex Nutting is Washington bureau chief for CBS MarketWatch.
bri
Ike,
Al always, thanks for your unique and insightful analysis.
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