While earlier today initial claims disappointed modestly to the upside, the economic print the market has been fascinated by is the otherwise C-grade economic indicator released by the BLS, the Employment Cost Index, which is quite a backward looking (today's release looked at Q2) at wages, salaries and benefits. The reason it is fascinated by it is that, supposedly, total employment costs rose the most in 6 years, with wages rising the most since Q3 2008 and benefits: the most since Q2 2011. And the reason why the risk switch has been pushed into the Off position is because this alleges that wages are finally rising, something which the Fed did not know yesterday, and which will make the hawkish case that much stronger.
So where did the wages and benefits rise the most? Here is the full breakdown by industry:
[3]
And by occupation.
[4]
Of course, the paradox is that while BLS is reporting surging labor costs (with a quarter lag), it is also reporting concurrent real hourly wages which continue to decline. [5]
[6]
Luckily, we will know the full story tomorrow when the BLS releases the far more important jobs data for July, which will have updated average hourly and weekly earnings data. Don't be surprised if it rejects everything that the BLS just reported today.
Meanwhile, the market is in risk off mode.
Stocks are sliding
[7]
as are bonds... (and gold)
[8]
