Euro zone Q1 labor cost rise slowest in five years

BRUSSELS Tue Jun 17, 2014 5:16am EDT

BRUSSELS (Reuters) - Wage growth in the euro zone decelerated to its slowest pace in at least five years in the first quarter and the number of available jobs in the bloc rose for the second consecutive quarter, official data showed on Tuesday.

The slowing pace of labor cost growth in the 18 countries sharing the euro is the latest sign that their competitiveness in the global economy continued to improve in the first three months of the year.

Annual labor costs growth nearly halved to 0.9 percent at the beginning of the year from 1.6 percent in the last quarter of 2013, EU's statistics office Eurostat data showed.

It was the slowest growth since the first quarter of 2009, when Eurostat data series starts.

As part of the overall labor costs, wages grew more slowly at 1.5 percent in the first quarter against 2.0 percent in the last three months of 2013.

Labor costs in Germany, the euro zone's growth engine, rose 1.1 percent in the first quarter, only half of what they grew in the previous quarter.

Southern periphery countries were mixed.

While Italy, the euro zone's third biggest economy, saw labor costs falling 0.1 percent on the year, Portugal, which exited its international bailout in May, had labor costs rising 1.5 percent on the year in the three months to March.

In a separate data release Eurostat started to publish job vacancy figures for the euro zone, paid jobs for which employers were looking for suitable candidates. The rate is a proportion of the number of vacant jobs to all jobs, vacant and taken, expressed as a percentage.

The job vacancy rate in the euro zone rose to 1.7 percent in the first quarter from 1.6 percent in the last quarter of 2013.

The highest job vacancy rates in the first quarter of 2014 were recorded in Germany with 2.9 percent and Belgium with 2.0.

(Reporting by Martin Santa)

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