EMPLOYMENT EVALUATION

While the Y-o-Y change in the 24Q1 Employment Cost Index (measuring wages, salaries, and quickly-rising benefits), came in at 4.2%, and the Q-o-Q reading was an uncomfortably hot 1.2%, this does not necessarily portend high inflation. The 24Q1 productivity reading was a very strong 2.6%, and 4.2% minus 2.6% means unit labor costs are rising at just 1.6%, hardly inflationary.