Employment Cost Index Preview
The Employment Cost Index measures the change in the cost of labor including salaries, wages and benefits and is reported 4 times a year. The reading this Wednesday is the last of the year. ECI topped out at .90 this year with a low reading of .80 in July. Wage pressures tend to go along with a good economy and have essentially been falling since they reached 1.20 in March of 2004. The consensus estimate for ECI this quarter is .90%, unchanged from the July reading. The FED will have these data at the FOMC meeting this week but it will be of lesser importance than Q3 Advance GDP. Indeed, if the FOMC still has inflation on the back burner and credit markets on the front, these data may not be in the FED’s musings at all. ECI comes out this Wednesday at 8:30am and will likely be over-shadowed by Q3 GDP which is released at the same time.