Euro zone first quarter labour cost rise slowest in 5 years

Wednesday 18 June 2014 18.20
Annual labour costs growth in the euro zone nearly halved to 0.9% at the beginning of the year
Annual labour costs growth in the euro zone nearly halved to 0.9% at the beginning of the year

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.

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

Annual labour costs growth nearly halved to 0.9% at the beginning of the year from 1.6% 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 labour costs, wages grew more slowly at 1.5% in the first quarter compared to 2% in the last three months of 2013. 

Labour costs in Germany, the euro zone's growth engine, rose 1.1% 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 labour costs falling 0.1% on the year, Portugal, which exited its international bailout in May, had labour costs rising 1.5% 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% in the first quarter from 1.6% in the last quarter of 2013.

The highest job vacancy rates in the first quarter of 2014 were recorded in Germany with 2.9% and Belgium with 2%.