BRUSSELS, March 19 Euro zone labour cost growth
accelerated for the first time in nine months in the last
quarter of 2013, data showed on Wednesday, in a sign the
economic recovery might be affecting wages despite persistently
Nominal hourly labour costs in the 17 countries which shared
the euro from October to December rose 1.4 percent compared with
the same period of 2012, after a 1.1 percent rise in the
previous quarter, the EU's statistics office Eurostat said.
Eurostat data showed that euro zone wages and salaries grew
1.9 percent on the year in the fourth quarter, after a 1.3
percent rise in the third quarter, while the non-wage component
Labour costs in Ireland, which has endured years of painful
cost adjustment to make its economy more competitive, rose too,
but at a slower pace than the euro zone average.
In Portugal, also undergoing adjustment to become more
competitive, labor costs actually fell, mainly thanks to a sharp
fall in the non-wage component like social security
contributions and taxes on labour paid by the employer.
The same reduction in the non-wage component kept French
labour cost growth at a fraction of the euro zone average.
Cyprus, which is struggling to re-start its economy after
the collapse of its oversized financial sector, saw the biggest
decline in labour costs of 6.5 percent year-on-year.
Labour costs in Italy, where the new government pledged to
introduce wide-reaching structural market reforms and meet set
deficit targets, rose 1.6 percent on the year in the fourth
quarter after a 0.9 percent rise in the previous period.
The rise in the bloc's nominal labour costs in the fourth
quarter was led by a 1.7 percent rise, year-on-year, in
industry, followed by a 0.9 percent increase in services and 0.3
percent growth in construction.
Inflation in the 9.5 trillion euro economy fell in February
to 0.7 percent year-on-year, matching its four-year low seen in
October, a level which triggered a surprise rate cut by the
European Central Bank in November.
The ECB expects inflation to stay below its official target
of close but below 2 percent until at least 2016, based on the
bank's latest forecasts published earlier this month.
Unemployment in the euro zone remains close to record highs
at 12 percent of the workforce.
(Reporting by Martin Santa)