What is an Employment Cost Index?
The employment cost index, or ECI, is a quarterly report compiled by the Bureau of Labor Statistics within the U.S. Department of Labor that offers wage and benefit information and provides a leading indicator of potential inflation.
How Does an Employment Cost Index Work?
Although overshadowed in the press by the more widely watched CPI, the ECI provides an early indicator of inflation. It is compiled based on payroll reports from the last month in each quarter and covers numerous industries and worker classifications, as well as a break-down of union and non-union wages. The ECI collects samples from across all these industries and categories, and reports on the changes from the previous quarter to highlight developing trends.
Why Does an Employment Cost Index Matter?
The U.S. Federal Reserve analyzes the ECI, in addition to other reports, in order to set monetary policy for the United States. Analysts use the ECI primarily to study labor costs and its inflationary effects within the United States.
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.
Read This Next
Quantitative Easing (QE) is a hot issue. But even though the term is used frequently...
Read More →
Think penny stocks will make you rich? If you don't understand the risks, you could end up penniless. Penny stocks are highly speculative and risky. In fact, many brokerages don't cover...
Read More →
Trendlines are one of the most common and helpful tools in a trader's kit. They are used to show a stock...
Read More →
As an investor who loves to buy, hold and collect returns from my investments, I usually hate the idea of having to sell one of the stocks...
Read More →
Humans are generally not very good at restraining themselves, which is why they invented handcuffs. You could make a solid argument that wedding rings count as handcuffs, but even if you...
Read More →
