Employment Cost Index (ECI) Definition

Term Definition
An index-based report that indicates compensation costs and payroll changes that are released on a quarterly basis by the U.S. Dept. of Labor.

Extended Definition
The quarterly Employment Cost Index report is a series of economic changes that records in great detail the compensation costs incurred by U.S.-based businesses. ECI is closely watched to detect positive or negative changes in employment costs, giving a more accurate indication of inflation in wages or employee benefits. Termed indispensable by the U.S. Federal Reserve, the ECI is vital for successful management and planning of all businesses except for employees of non-farm industries and the U.S. federal government.

Related Article:
Why Small Businesses Should Watch the Employment Cost Index