MW: U.S. employment cost index posts fastest rise since 2008
By Jeffry Bartash
WASHINGTON (MarketWatch) - An index that measures the price of U.S. labor rose in the second quarter at the fastest pace since the fall of 2008, largely because of higher retirement and health-care benefits. The employment cost index climbed 0.7% in the second quarter after a 0.3% increase in the first quarter. Economists surveyed by MarketWatch had expected a 0.5% gain. Wages - some 70% of employment costs - rose 0.6% in the second quarter. That's also the biggest increase since the third quarter of 2008. Yet benefits rose even faster, up 1%, mainly because of an increase in the cost of retirement plans. Health-care benefits also rose, likely a result of the introduction of Obamacare. Over the past 12 months, employment costs have risen 2%, up from the first-quarter rate of 1.8%. The ECI is a closely followed gauge that reflects how much companies, governments and nonprofit institutions pay their employees in wages and benefits.
