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The Employment Cost Index

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The Employment Cost Index (ECI), an important measure of compensation growth, gauges changes in employers’ labor costs. Just as the Consumer Price Index (CPI) tracks prices for a fixed market-basket of goods, the ECI charts compensation of workers in a fixed set of industries and jobs within industries. Because it is not affected by shifts in occupation composition, the ECI can effectively measure labor costs for the same jobs over time.

Suggested citation: "The Employment Cost Index," Federal Reserve Bank of Cleveland, Economic Trends, no. 99-12, pp. 12, 12.01.1999.

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