US: Employment cost index likely to gain 0.6% for Q2 2018 - Nomura

Analysts at Nomura are forecasting a 0.6% q-o-q gain in the overall employment cost index for Q2 2018 and a similar 0.6% q-o-q gain for the wages and salaries component, corresponding to 2.8% y-o-y for both series.

Key Quotes

“Wage growth during Q2, as reported by the monthly BLS employment report, increased healthily by 0.65% q-o-q for total private workers and 0.8% q-o-q for production and nonsupervisory employees.”

“The ECI’s wages and salaries component increased strongly by 0.9% q-o-q in Q1 with broad-based strength among subcomponents. However, we view that pace as likely unsustainable in the coming quarters as some of that increase was driven by an unusually strong increase in the financial service sector.”