The Employment Cost Index (ECI) includes changes in wages and salaries and unemployment benefits. It can serve as an indicator of inflationary developments in a nation’s economy. The ECI is one of those indices that the Federal Reserve closely monitors while pursuing its monetary policy. It is also called “Alan Greenspan’s favorite indicator”. Amid expectations of a hike in the key interest rate, an increase in the ECI contributes to the strengthening of the US dollar. It is used for mid-term and long-term forecasts. The ECI report is released on a quarterly basis after the 20th day of the publication month at 08:30 am EST.
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