Washington, DC, April 29--The employment-cost index rose 0.7% after a 0.8% increase in the fourth quarter of 2004, according to the Labor Department.
The results reflect some slowing of benefits costs, which grew at lowest rate in three years. Wages and salaries grew at a faster clip, climbing 0.6% after a 0.5% gain in the fourth quarter. In the year through March, employment costs were up 3.5%, the lowest rate in about five years.
Wages and salaries, which account for about 70% of the employment-cost index, grew at the fastest pace in six months. In year-on-year terms the increase was 2.4%, unchanged from the annual rate in 2004. The growth of benefit costs, which have climbed much faster than wages over the last two years, slowed to a 1.2% rate in the first quarter, the lowest since the first quarter of 2002.
In annual terms benefit costs were up 5.9% in the year through March, down from a 6.7% rate over the course of 2004. Many economists attribute the sluggish pace of hiring recently in part to the rapid growth of benefit costs, especially for health insurance.
