|

Employment Costs Rise More than Expected in Q1

Employment costs in the first quarter rose by the most since the start of the recession, increasing 0.8 percent. Wages & salaries are up 2.5 percent from a year ago, consistent with gradual tightening in the labor market.

Compensation Costs Picking Up

  • Compensation costs heated up for employers in the first quarter, with the Employment Cost Index posting the strongest quarterly gain since 2007.

  • Costs for both wages and benefits rose more rapidly in Q1, although wage growth continues to outstrip increases in benefits. Over the past year, the rise in benefit costs have been held down by the slowest rise in healthcare benefits since 1997.

Wage Pressures Building

  • Up 2.5 percent over the past year, wage pressures are slowly building amid the tighter labor market. Wages in the private sector rose 0.9 percent in Q1 versus 0.6 percent in government.

  • The upward trend in wages looks even more convincing when stripping out incentive-paid workers (whose pay tends to be more volatile) and looking at average hourly earnings (which is based on a larger sample).

Download The Full Economic Indicators

Author

More from Wells Fargo Research Team
Share:

Editor's Picks

EUR/USD holds steady above 1.1850 as markets eye Eurozone GDP, US CPI inflation releases

The EUR/USD pair trades on a flat note near 1.1870 during the early Asian session on Friday. The major pair steadies amid mixed signals from the latest release of US economic indicators. Traders await the preliminary reading of the Eurozone Gross Domestic Product for the fourth quarter and US inflation data, which are published later on Friday.  

GBP/USD consolidates around 1.3600 vs. USD; looks to US CPI for fresh impetus

The GBP/USD pair remains on the defensive through the Asian session on Friday, though it lacks bearish conviction and holds above the 1.3600 mark as traders await the release of the US consumer inflation figures before placing directional bets.

Gold: Will US CPI data trigger a range breakout?

Gold retakes $5,000 early Friday amid a turnaround from weekly lows as US CPI data loom. The US Dollar consolidates weekly losses as AI concerns-driven risk-off mood stalls downside. Technically, Gold appears primed for a big range breakout, with risks skewed toward a bullish break.

Bitcoin, Ethereum and Ripple stay weak as bearish momentum persists

Bitcoin, Ethereum and Ripple remain under pressure, extending losses of over 5%, 6% and 4%, respectively, so far this week. BTC trades below $67,000 while ETH and XRP correct after facing rejection around key levels. With bearish momentum persisting and prices staying weak, the top three cryptocurrencies continue to show no clear signs of a sustained recovery.

A tale of two labour markets: Headline strength masks underlying weakness

Undoubtedly, yesterday’s delayed US January jobs report delivered a strong headline – one that surpassed most estimates. However, optimism quickly faded amid sobering benchmark revisions.

Aster Price Forecast: Demand sparks on Binance Wallet partnership for on-chain perpetuals

Aster is up roughly 9% so far on Thursday, hinting at the breakout of a crucial resistance level. Aster partners up with Binance wallet for the second season of the on-chain perpetuals challenge.