Total compensation costs for civilian workers increased 0.7 percent from September to December 2004, seasonally adjusted, moderating from the 0.9 percent gain from June to September, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Benefit costs rose 1.4 percent, while wage and salary costs increased 0.4 percent, the smallest quarterly increase in wage and salaries in 2004. The Employment Cost Index (ECI), a component of the National Compensation Survey, measures quarterly changes in compensation costs, which include wages, salaries, and employer costs for employee benefits for nonfarm private and State and local government workers.
Rises in benefit costs accounted for more than 60 percent of the increase in compensation costs for civilian workers from September to December 2004. Among private industry workers, benefit costs contributed nearly two-thirds of compensation gains during the quarter, with defined benefit retirement costs accounting for nearly one-third of the gain in compensation costs. Among State and local government workers, benefit costs composed half of compensation gains during the September to December period, with health insurance costs accounting for one-fifth of the gain in compensation costs.
Quarterly changes, seasonally adjusted
Compensation costs for the private sector rose 0.7 percent from September to December 2004, after advancing 0.9 percent in the prior quarter. December gains were led by goods-producing industries. For State and local government workers, compensation costs rose 1.0 percent in December, a gain from the 0.5 percent advance in September.Benefit cost increases accelerated to 1.4 percent for civilian workers (nonfarm private industry and State and local government) in the December 2004 quarter, following a gain of 1.1 percent in the September quarter. Private sector benefit costs rose 1.5 percent for the December quarter, significantly higher than the 1.0 percent gain in the previous quarter. Benefit costs for State and local governments increased 1.5 percent in the December quarter, following an increase of 1.4 percent in September 2004.
Gains in wages and salaries for civilian workers increased 0.4 percent during the December quarter, moderating from a gain of 0.7 percent in September 2004. Wages and salaries for private industry workers rose 0.4 percent for the December quarter, slowing from the 0.9 percent gain during the prior period. Wage and salary gains slowed in goods-producing, transportation and public utilities, and wholesale trade industries. Wages and salaries in State and local government advanced 0.7 percent during the September-to-December period, after a 0.1 percent change in the previous quarter.
Over-the-year changes, not seasonally adjusted
Annual compensation costs for civilian workers increased 3.7 percent for the year ended December 2004, virtually unchanged from a 3.8 percent over-the-year increase for December 2003. Compensation costs in private industry rose 3.8 percent in the year ended December 2004, compared with a 4.0 percent increase in December 2003. Compensation costs increased 3.5 percent for State and local governments for the year ended December 2004, compared with an over-the-year gain of 3.3 percent in December 2003.The components of compensation showed dramatic differences in the rate of change. While increases in wages and salaries continued at a moderate pace, benefit costs continued to rise sharply. For civilian workers, wages and salaries rose 2.4 percent in the year ended December 2004, compared with a gain of 2.9 percent in December 2003. Wages and salaries for private industry workers also gained 2.4 percent for the year ended December, compared with an increase of 3.0 percent in December 2003. Benefit costs rose 6.9 percent for civilian workers for the period ended December 2004, compared with the increase of 6.3 percent for the year ended December 2003.
