Employers' cost for providing benefits to their employees rose 1.1% in the third quarter ended Sept. 30, the smallest quarterly increase in two years, according to the Employment Cost Index, produced by the U.S. Bureau of Labor Statistics. The benefits portion of the index had risen 1.7% in the second quarter and 2.6% in the first quarter. The ECI attempts to measure employers' total compensation costs for employees, excluding federal government, military and agricultural workers. The benefits portion is made up of both health insurance and retirement benefits and is used by some economists as a gauge of healthcare costs.
For the 12 months through September, employers' cost of providing benefits for all civilian employees rose 6.8%, up slightly from the previous 12-month period when the rise was 6.5%. For private employers, benefit costs rose 1% in the quarter and 6.8% in the 12-month period. Among state and local government employees, the increase was 1.4% and 6.4%, respectively.