Merrill Lynch: ECI Shows Personal Income Slowing

By John S. McClenahen The U.S. Labor Department's Employment Cost Index (ECI), said to be one of the economic indicators that Federal Reserve Board Chairman Alan Greenspan tracks closely, rose just 0.7% from October through December in 2002, far less than the 1% increase economists generally expected. A 1.3% increase in benefits costs -- which includes health insurance, retirement plans, paid leave and Social Security -- was in line with quarterly increases during the past four years, the Labor Department notes. But the big surprise is that wages and salaries for civilian workers were up only 0.4% during the quarter, "a puny" 2.7% year-over-year rate and the weakest since 1993's second quarter, figures David Rosenberg, chief North American economist at Merrill Lynch & Co., New York. "Personal income is slowing, folks, and a tough labor market will likely keep this trend intact," he states.

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