Employment Cost Index

employment cost index

A closely watched economic report by the Bureau of Labor Statistics that indicates the total cost of employing a civilian worker. A larger-than-expected increase in the index is likely to place downward pressure on both bond and equity prices.

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Employment Cost Index

An index compiled by the Bureau for Labor Statistics estimating the cost of hiring and paying the American workforce. Analysts closely monitor the employment cost index: an unexpectedly large increase may result in downward pressure in the market. This is because a rise in the cost of paying employees reduces profits, which in turn reduces stock prices. It may also reduce bond prices because rises in the ECI are seen as a harbinger of inflation.