* Labour costs rise at slowest pace since 2009
* Inflation drops in August, warrants record low rates
BRUSSELS, Sept 16 Labour costs in the euro zone
rose at their slowest pace in four years in the second quarter
in a sign that the bloc's indebted economies are becoming more
competitive, while inflation in August remained low.
Nominal hourly labour costs in the 17 countries using the
euro grew by 0.9 percent in the April-to-June period, following
a 1.7 percent increase in the first quarter, the EU's statistics
office Eurostat said on Monday.
Eurostat also said consumer prices in the euro zone edged up
by 0.1 percent on the month in August, following a 0.5 percent
drop in July. Annual consumer price inflation fell to 1.3
percent from 1.6 percent in July.
Inflation remains well below the European Central Bank's
target of close but below 2 percent, warranting the bank's
pledge to keep interest rates at current levels or lower for an
extended period of time to help the recovery.
ECB President Mario Draghi said on Monday that the euro
zone's economy, which ended its recession in the second quarter,
remained "fragile" and unemployment was "still far too high".
In one positive sign, Ireland and Portugal, which are
seeking to end their international financial aid programmes in
the coming months, saw labour costs rising at a pace that was
slower the bloc's average.
In Italy, labour costs slowed their rise to 0.6 percent from
2.5 percent in the first quarter.
Spain reported a 0.3 percent fall in labour costs.
In Germany, which produces more than half of the euro zone's
exports, labour costs grew by 1.8 percent, down from the 3.7
percent jump in the first quarter.
In contrast, labour costs in France, the bloc's second
largest economy, rose by 0.5 percent after 0.1 percent growth in
the previous period.