US employment cost index rises as expected in fourth quarter

Employment costs in the US kept growing at a steady pace at the end of last year boosted by increased benefits payments for state and local government staff.

The Employment cost index for civilian workers increased at a 0.6% quarter-on-quarter clip in the final three months of 2015, the same as in the previous quarter, according to the Bureau of Labour Statistics.

That was exactly as expected by economists.

In comparison with a year ago, compensation was 2.0% higher, down from 2.2% in December 2014.

Wages and salaries expanded at a 0.6% clip, the same as in the previous quarter while benefits payments accelerated from a 0.5% quarterly rate of change in the third quarter to 0.7% in the fourth.

However, compensation, which includes both salaries and benefits, slowed in private industry from 0.6% to 0.5%.

Government workers on the other hand saw their total compensation increase by 0.8% versus a 0.6% gain in the prior quarter.

Benefits payments for government workers jumped by 1.4% over the quarter after a rise of 0.7% in the previous three months, taking the year-on-year gain to 3.5%.