A measure of total employee compensation costs, including wages and salaries as well as benefits. The employment cost index (ECI) is the broadest measure of labour costs. The employment cost index helps analysts determine the trend of the direction of the cost for employers from having employees.

This can give economists a clue whether inflation is perking up from a cost of doing business standpoint. If a company needs to pay more to hire qualified workers than the cost of doing business increases. This reduces profit margins companies usually raise their prices to consumers if their costs increase and that is where the inflation theme plays out.