EMPLOYMENT COST INDEX -- MARCH 2004

Total compensation costs for civilian workers increased 1.1 percent from December 2003 to March 2004, seasonally adjusted, rising from the 6.8 percent gain from September to December 2003, the Bureau of Labor Statistics of the U.S. Department of Labor reported.

Benefit costs jumped 2.4 percent,

The Employment Cost Index, a component of the national compensation survey, measures quarterly changes in compensation costs, which include wages, salaries, and employer costs for employee benefits for nonfarm private and state and local government workers.

Although benefits contribute only 30 percent to total compensation costs, two-thirds of the increase in compensation costs were attributable to rises in benefit costs during the December 2003 to March 2004 period.

Among private industry workers, benefit costs accounted for 67 percent of compensation gains during the quarter, with defined benefit retirement costs accounting for nearly half of the rise in benefit costs. Among state and local government workers, benefit costs contributed 63 percent of compensation gains during the December 2003 to March 2004 period, and health insurance contributions accounted for more than one-half of the gain in benefit costs.

Quarterly changes, seasonally adjusted compensation costs for the private sector rose 1.1 percent from December 2003 to March 2004, after advancing 0.8 percent in the prior quarter. March gains were led by sharp increases in manufacturing, particularly durable goods manufacturing, and smaller gains in retail trade.

For state and local government workers, compensation costs increased 1.0 percent from December to March, compared with a gain of 0.8 percent for the quarter ended in December.

Benefit costs jumped 2.4 percent for civilian workers (nonfarm private industry and state and local government) in the March 2004 quarter, following a gain of 1.4 percent in the December 2003 quarter.

Private-sector benefit costs shot up 2.6 percent for the March quarter, sharply higher than the 1.4 percent gain in the previous quarter. Benefit costs for state and local governments increased 1.7 percent in the March quarter, following an increase of 1.3 percent in December 2003.

Wages and salaries for civilian, private, and state and local government workers each advanced 0.6 percent during the March quarter.

During the prior quarter, civilian and private-industry wages and salaries rose 0.5 percent, and state and local government wages and salaries rose 0.6 percent.