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Eurozone labour costs rise at fastest pace in six years

Non-wage costs rising faster than wages

Eurozone labour costs rose at their steepest rate in almost six years in the second quarter of 2018, data released on Friday showed, supporting the European Central Bank as it curbs economic stimulus.

Labour costs in the 19 countries sharing the eurozone rose by 2.2 per cent year-on-year, EU statistics agency Eurostat said, up from 2.1 per cent in the first quarter.

The increase was the highest rate since the third quarter of 2012.

The ECB is on track to end bond purchases this year and raise interest rates next autumn with inflation rebounding and growth levelling off at a relatively healthy pace.

Eurozone wage costs rose by 1.9 per cent, the steepest increase in a year, while non-wage labour costs were up 2.9 per cent.

Among the larger countries, labour costs rose by 3.6 per cent in Italy, 2.4 per cent in France, 2.0 per cent in Germany and just 0.7 per cent in Spain.

The highest annual increases in hourly labour costs were registered in Romania (+15.6%), Latvia (+11.7%) and Hungary (+10.2%), while the lowest annual increases in hourly labour costs were recorded in Luxembourg (+0.6%), Spain (+0.7%) and the Netherlands (+0.9%). Malta's rose by 3 per cent.

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