Employment Cost Index

The Employment Cost Index measures the quarterly change in the total cost employers pay for labor, combining wages and salaries with the cost of employer-provided benefits such as health insurance and retirement contributions, and it is distinctive among labor-cost measures because it holds the mix of occupations and industries fixed over time, so its readings reflect true price change in labor rather than compositional shifts in the workforce. Published quarterly in the United States by the Bureau of Labor Statistics since 1975, the Federal Reserve treats it as one of the most reliable gauges of underlying wage inflation pressure precisely because of that fixed-weight design.