Wages and Benefits Rise More Than Expected, Bond Yields Jump

Employer costs are soaring. The Employment Cost index (ECI) unexpectedly rose 1.2 percent in 2024 Q1, rattling the stock and bond markets.

The BLS Employment Cost Index was on the hot side for the first quarter of 2024.

• Compensation costs for civilian workers increased 1.2 percent, seasonally adjusted, for the 3-month period ending in March 2024
• Wages and salaries increased 1.1 percent and benefit costs increased 1.1 percent from December 2023.

Wages and Benefits Percent Change from Year Ago

Year-Over-Year and Monthly Annualized Details

• Compensation costs for civilian workers increased 4.2 percent for the 12-month period ending in March 2024 and increased 4.8 percent (annualized) in March 2023.
• Wages and salaries increased 4.4 percent for the 12-month period ending in March 2024 and increased 5.0 percent for the 12-month period ending in March 2023.
• Benefit costs increased 3.7 percent over the year.
• Compensation costs for private industry workers increased 4.1 percent over the year. In March 2023, the increase was 4.8 percent annualized.
• Wages and salaries increased 4.3 percent for the 12-month period ending in March 2024 and increased 5.1 percent annualized in March 2023.
• The cost of benefits increased 3.6 percent for the 12-month period ending in March 2024 and increased 4.3 percent annualized in March 2023.

Major Employment Cost Index Categories

Total compensation for civilian workers jumped 1.2 percent vs Bloomberg Econoday expectations of 0.9 percent. Annualized, the monthly change was 4.8 percent.

Economists took the rise last quarter and estimated the same again.

Special merit goes to state and local government employees who are doing much better than the averages (red highlights) in the above chart.

This does not bode well for those expecting rate cuts by the Fed. Yield on the 10-year note is up 7 basis points to 4.69 percent. And the 30-year mortgage rate jumped 8 basis points to 7.51 percent.

Truflation Silliness

On April 20, I noted Truflation Claims Inflation is 2.06 Percent

Would you believe believe year-over year inflation is barely over two percent? That’s the Truflation claim as of April 17, 2024.

Some otherwise bright people on Twitter whom I follow actually believe that Trufltion nonsense. Click on the above link for details.

On April 19, I noted Auto and Home, Insurance & Maintenance Costs Soaring and People Are Angry

Some homeowners are skipping home insurance. What’s going on and who is to blame?

Costs are rising and so are wages.

Chipotle CEO on Menu Prices

Food away from home has risen at least 0.3 percent for 34 out of the last 36 months.

On April 28, I noted Chipotle CEO on Menu Prices “California Isn’t Making It Easy”

Sticker Shock in California

Higher state minimum wage went into effect April 1; chains say burritos and burgers are getting more expensive in response.

Expect another big jump in employer costs next quarter too.