Economic calendar: Q2 employment cost index rises 0.9%
The BLS Employment Cost Index released July 31, 2026 showed civilian compensation up 0.9% in Q2 and 3.4% over 12 months, with real private wages down 0.4%.
| ECI series | 3-month (SA) | 12-month (NSA) |
|---|---|---|
| Civilian total compensation | +0.9% | +3.4% |
| Civilian wages and salaries | +0.9% | +3.2% |
| Civilian benefits | +1.0% | +3.8% |
| Private industry compensation | +0.9% | +3.3% |
| State and local government compensation | +1.0% | +3.6% |
| Private wages, inflation-adjusted | n/a | -0.4% |
The quarterly Employment Cost Index landed on the economic calendar on Friday, July 31, 2026, and showed employer compensation costs rising at a steady clip through the second quarter. Total compensation for civilian workers increased 0.9% over the three months ending in June, seasonally adjusted.
Wages and salaries rose 0.9% for the quarter, while benefit costs rose 1.0%. The pattern was similar in private industry, where compensation, wages and benefits each rose 0.9%. State and local government employers posted slightly faster growth, with compensation up 1.0% and benefits up 1.1%.
Over 12 months, civilian compensation costs increased 3.4%, made up of a 3.2% rise in wages and salaries and a 3.8% rise in benefits. Private industry compensation grew 3.3% on the year; state and local government compensation grew 3.6%, with government benefit costs up 4.0%.
The inflation-adjusted figures were the more telling part of the release. In constant dollars, private industry wages and salaries fell 0.4% over the year, and state and local government wages slipped 0.1%. Put simply, pay gains measured by the ECI did not keep up with consumer prices over the period.
The benefits component deserves attention on its own. Benefit costs grew faster than wages across civilian, private and government employers over the 12 months, with state and local government benefits up 4.0%. Benefit costs include items such as health insurance and retirement contributions, which employers often treat as less flexible than base pay. When benefits outpace wages, total compensation can keep rising even if employers hold the line on salary increases.
The ECI is often preferred over average hourly earnings as a labor-cost gauge because it holds the mix of jobs fixed, which limits distortions when employment shifts between high- and low-wage industries. That makes it a closely watched input for assessing whether labor costs are adding to or easing inflation pressure.
BLS scheduled the next release, covering the September 2026 quarter, for Friday, October 30, 2026. Watch whether nominal compensation growth accelerates enough to turn real wages positive, or whether benefit costs continue to outpace pay.
Prepared with AI assistance from public sources and reviewed under our editorial policy. Not investment advice.