The BEA released the core inflation information this morning and it’s not good.
And to add injury to insult, the BLS released the Employment Cost Index Summary which shows an uptick in the cost of labor.
EMPLOYMENT COST INDEX – JUNE 2025
Compensation costs for civilian workers increased 0.9 percent, seasonally adjusted, for the 3-month period ending in June 2025, the U.S. Bureau of Labor Statistics reported today. Wages and salaries increased 1.0 percent and benefit costs increased 0.7 percent from March 2025. (See tables A, 1, 2, and 3.)
Compensation costs for civilian workers increased 3.6 percent for the 12-month period ending in June 2025. Wages and salaries increased 3.6 percent for the 12-month period ending in June 2025. Benefit costs increased 3.5 percent for the 12-month period ending in June 2025. (See tables A, 4, 8, and 12.)
Compensation costs for private industry workers increased 3.5 percent over the year. Wages and salaries
increased 3.5 percent for the 12-month period ending in June. The cost of benefits increased 3.4 percent
for the 12-month period ending in June 2025. Inflation-adjusted (constant dollar) wages and salaries
increased 0.8 percent for the 12 months ending June 2025. (See tables A, 5, 9, and 12.)
Within private industry by bargaining status, compensation costs increased 4.3 percent for union workers and 3.4 percent for non-union workers for the 12-month period ending in June 2025. Wages and salaries increased 4.6 percent for union workers and 3.5 percent for non-union workers for the 12-month period ending in June 2025. Benefit costs increased 3.8 percent for union workers and 3.4 percent for non-union workers for the period ending in June 2025. (See tables 6, 10, and 12.)
Compensation costs for state and local government workers increased 4.0 percent for the 12-month period ending in June 2025 and increased 4.9 percent in June 2024. Wages and salaries increased 3.9 percent for the 12-month period ending in June 2025 and 5.1 percent in June 2024. Benefit costs increased 4.1 percent for the 12-month period ending in June 2025. The prior year’s increase was 4.8 percent.
(See tables A, 7, 11, and 12.)
With many new trade “deals” now including tariffs of 15% or more, we think inflation is here to stay and grow which is why we think the Fed was prudent in keeping rates unchanged at their meeting yesterday.
We have not been actively trading this market because it is at nose bleed levels but are looking at put options on major indexes targeting 2026 and 2027.
We’ll keep you posted so stay tuned, stay profitable and stay solvent….