Q4 Employment Cost Index
The Employment Cost Index for Q4, released tomorrow at 8:30am EST, is projected to rise 0.8%. The ECI measures changes in the cost of labor, including salaries, wages, and benefits.
Tomorrow’s reading follows a 0.8% increase for Q3 (reported in October).
Wage pressures tend to increase in times of economic expansion. ECI has been fairly steady (0.8-0.9%) since spring 2006, but could be weaker for Q4 ’07 as the US economy registered bleaker-than-expected Q4 GDP data today — a meager 0.6% rise in overall US economic expansion.
The FED has expressed some concern regarding labor markets of late so if ECI comes in higher than expected, it could reinforce, in part, the FED’s aggressive rate cuts.