Long Term Perspective
Federal Reserve officials closely monitor the employment cost index, which measures total compensation costs. Compensation includes wages and salaries as well as benefits. Compensation costs surged at the end of 1999 and beginning of 2000, but stabilized during the year.

Short Term Perspective
The ECI increased at a 4.1 percent rate in the third quarter of 2001. As labor market conditions deteriorate, this compensation measure will slow further. It is good news for companies, but not for consumers. The employment cost index for the fourth quarter won't be released until the end of January.

PPI: Intermediate vs. Crude Materials   •   Excluding Food & Energy Prices: Intermediate vs. Crude   •   CPI vs. PPI - Finished Goods

Excluding Food & Energy Prices : CPI vs. PPI   •   Employment Cost Index vs. Wages & Salaries   •   Alternative Inflation Measures