U.S. employment cost index rises above expectations in Q1 2017

The U.S. employment cost index (ECI) was rose more than anticipated in the first quarter of 2017. The index was up 0.8 percent, coming in higher than the consensus expectations of 0.6 percent. However, it is in line with the longer-run view that faster wage growth will be seen in 2017 as compared to the last few as tightening labor market conditions exert upward pressure on wage inflation.

The year-on-year growth accelerated to 2.4 percent, in line with other measures of wage inflation. Wages and salaries rose 0.8 percent on a quarter-on-quarter basis, while the growth rate of benefits came in at 0.7 percent quarter-on-quarter.