Employment Cost Index

Who: National Compensation Survey program

When: Quarterly and annually

What: The Employment Cost Index, often referred to as total compensation cost, reports all types of employee compensation: wages and salaries, non-wage cash payments and fringe benefits. Total compensation in the Employment Cost Index is defined as the employer's cost of wages and salaries and employee benefits.

Why: The ECI offers insight into trends with wages, possible risks of wage inflation and possible price pressures. An increase in wage inflation could spark interest rate changes as the Fed may intervene or market forces may take over. ECI is thought to be a lagging indicator but it does show adjustments for shifting employment between industries and benefit costs. Quarter-to-quarter or year-to-year changes are more closely watched rather than the month-to-month reports.