Long Term Perspective
The employment cost index is the most comprehensive measure of compensation costs faced by employers. Wages and salaries account for the bulk of the index, whereas benefits costs account for about one-third of compensation costs. Fed officials monitor this indicator because they believe that accelerating pressures on compensation will eventually lead to price increases for consumer goods and services.

Short Term Perspective
The employment cost index accelerated slightly in the third quarter of 2001 due to a surge in benefit costs. Wages and salaries continued to moderate. Furthermore, greater improvement is expected in months ahead as the unemployment rate increases. Fourth quarter figures won't be available until the end of January.

Alternative Inflation Measures   •   Gold Prices   •   Employment Cost Index   •   Civilian Unemployment Rate

Pool of Available Labor   •   Nonfarm Productivity   •   Treasury Yields   •   Stock Prices   •   Fed Monetary Policy Summary