US employment cost Index for Q1 comes in at 1.2% versus 1.0% expected

• Prior quarter 0.9% (was expecting 1.0%)
• Employment cost index for Q1 2024 .2% vs 1.0% expected
• Wages 1.1% versus 0.9% last month
• Benefits 1.1% versus 0.7% last month

YoY the numbers are lower from a year ago but still elevated:

• Overall compensation costs increased by 4.2% for the year ending in March 2024, compared to a 4.8% increase in the previous year (March 2023).
• Wages and salaries rose by 4.4% for the year ending in March 2024, down from a 5.0% increase in the year ending in March 2023.
• Benefit costs increased by 3.7% for the year ending in March 2024, compared to a 4.5% increase in the year ending in March 2023

The employment cost index is seen inside the Fed as the highest quality measure of compensation growth. As such this is a more hawkish report. US yields are reacting accordingly with a move to the upside.

• 2-year yield +5.4 basis points.
• 5-year yield +6.2 basis points
• 10 year yield +5.0 basis points

Looking at the US stocks in premarket trading, futures or implying declines:

• S&P index is down -22 point.
• Dow Industrial Average averages down about -143 points and
• NASDAQ is down -88 points

September Fed rate cut is now at 50-50 as the markets continue to push out Fed cuts (or lack thereof).

This article was written by Greg Michalowski at www.forexlive.com.