Employment Cost Index - ECI

Filed Under » ,
Dictionary Says

Definition of 'Employment Cost Index - ECI'

A quarterly report from the U.S. Department of Labor that measures the growth of employee compensation (wages and benefits). The index is based on a survey of employer payrolls in the final month of each quarter. The ECI tracks movement in the cost of labor, including wages, fringe benefits and bonuses for employees at all levels of a company.
Investopedia Says

Investopedia explains 'Employment Cost Index - ECI'

The idea behind analyzing ECI is that as wage pressures increase, so does inflation because compensation tends to increase before companies increase prices for consumers. Thus, it is considered inflationary when the ECI has an increasing trend or exhibits a jump that is higher than expected for a given period. In addition, as inflation increases, yields and interest rates also rise, resulting in a decrease in bond prices.

Articles Of Interest

  1.

    Advanced Bond Concepts

    Learn the complex concepts and calculations for trading bonds including bond pricing, yield, term structure of interest rates and duration.

  2. Introduction To Treasury Inflation-Protected Securities (TIPS)

    If you want to protect your portfolio from inflation, all you need are a few TIPS.

  3. Introduction To Coincident And Lagging Economic Indicators

    Investors can learn a lot, or very little, from these indicators once they know how to use them.

  4. Economic Indicators That Do-It-Yourself Investors Should Know

    Understanding these investing tools will put the market in your hands.

  5. 10 Great Investment Books For The Holidays

    Looking for the perfect gift? Here's a list of informative reads you'll want to share with others this season.

  6. Using LEAPS With Collars

    This options strategy will help you lock in profit while keeping your upside potential.

  7. Equity Investing For The Buy-And-Holder

    The buy-and-hold investment strategy requires investors to disregard their emotional responses to market movements.

  8. 3 Reasons Why You Need To Understand Investing

    Everyone should learn a few investing basics, even if you plan to hire an investment professional.

  9. Mutual Funds Vs. ETFs: Small Cap Stocks

    For individual investors, a passive strategy may be best when investing in the small-cap realm of equities.

  10. All Weather Investing With ETFs

    All Weather investment strategies can shield investors during the worst bear markets.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Racketeering

    Racketeering refers to criminal activity that is performed to benefit an organization such as a crime syndicate. Examples of racketeering activity include...

  2. Lawful Money

    Any form of currency issued by the United States Treasury and not the Federal Reserve System, including gold and silver coins, Treasury notes, and Treasury bonds. Lawful money stands in contrast to fiat money, to which the government assigns value although it has no intrinsic value of its own and is not backed by reserves.

  3. Fast Market Rule

    A rule in the United Kingdom that permits market makers to trade outside quoted ranges, when an exchange determines that market movements are so sharp that quotes cannot be kept current.

  4. Absorption Rate

    The rate at which available homes are sold in a specific real estate market during a given time period.

  5. Yellow Sheets

    A United States bulletin that provides updated bid and ask prices as well as other information on over-the-counter (OTC) corporate bonds...

  6. Bailment

    The contractual transfer of possession of assets or property for a specific objective.
Trading Center