January 29, 2021

The employment cost index for civilian workers climbed at a 2.8% rate in the fourth quarter after rising at a 2.0% rate in the third quarter.   Over the course of the past year it has risen 2.5%.

With the unemployment rate having climbed to 14.7% in April and remaining high at 6.7% in December, there is no longer going to be upward pressure on wages caused by the very tight labor market.

Wages climbed at a 3.4% rate in the fourth quarter after rising at a 1.7% rate in the third quarter..  Wages  and have risen 2.6% in the past year, slightly slower than in the past couple of years.

Benefits climbed at a 2.5% pace in the fourth quarter after rising at a 2.2% rate in the third quarter.  Over the past year benefits have risen 2.3%.

Stephen Slifer

NumberNomics

Charleston, SC