The Employement Cost Index (ECI) is generally considered to be one of the most comprehensive measurement of labor costs and their growth rate and as such, it is said to signal changes in wage inflation.
The impacts of the data can herald changes in interest rates, as shown by larger than expected increases on the prior results, which may cause interest rates to rise. Large growth rates in the ECI also increase the likelihood for an increase in the Federal Funds Rate.
The Employment Cost Index is closely watched by many sectors, including the Federal Reserve and those involved in the currency markets as it accurately measures changes in labor costs for monetary based wages such as salaries, but also reflects changes in non monetary forms of wages such as common fringe benefits occurring in private industries. These factors are measured for both public sector workers as well as those employed in state and local governments jobs, and takes into account at all levels of responsibility.
While the overall influence on currency markets and foreign exchange rates may be considered at times uncertain, high wages inflation generally leads to higher overall inflation and eventually a loss of competitiveness. However, it can also lead to higher nominal level in interest rates which would tend in the end to strengthen the exchange rate.
U.S. Department of Labor, Bureau of Labor Statistics
Last week of the month following the prior quarter to which it refers.
http://www.bls.gov/news.release/eci.toc.htm Bureau of Labor Statistics Official Website – Employment Cost Index