BRUSSELS (Reuters) - Euro zone wages rose in the first quarter of the year at the highest pace ever recorded since data is collected, data from the European Union’s statistics office showed on Monday.
The increase is a positive signal for the European Central Bank’s plans to drive inflation up but has so far not translated into higher prices in the 19-country euro zone.
Eurostat said wages and salaries rose 2.5% in the first three months of the year compared to the same quarter of the previous year, posting the highest increase since 2010, when it started gathering data.
Salaries’ increased 2.3% in both the previous two quarters.
Wages rose more than overall labor costs which in the first quarter increased by 2.4%, Eurostat said.
The non-wage component of labor costs went up by 2.2%, offsetting the increase in wage costs.
Although wages are rising and employment is at a record high, consumer prices have repeatedly disappointed and underlying inflation remains weak, baffling policymakers and putting in doubt the central bank’s ability to control prices.
In the three-month period when wages reached their record growth, euro zone inflation was up by a maximum of 1.5% in February, and posted a 1.4% increase in January and March, still far from the ECB’s target of a rate close but below 2%.
In May inflation slowed to 1.2%, the latest Eurostat figures show.
Reporting by Francesco Guarascio @fraguarascio and Sabine Siebold
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