Euro zone labour costs jump 5.7% y/y in Q4

BRUSSELS (Reuters) – Euro zone labour costs jumped in the last three months of 2022, and third quarter data was revised up as well, but the rise of the wage component was still roughly half of the increase in consumer inflation, data showed on Friday.

The European Unions statistics office Eurostat said labour costs in the 19 countries that shared the euro in the last quarter of 2022 rose 5.7% year-on-year, with wages up 5.1% and non-wage labour costs up 7.7%.

Labour costs of the third quarter of 2022 were revised upwards to 3.7% year-on-year from 2.9% reported earlier and wage growth to 3.0% from 2.1%

Consumer inflation was 9.2% year-on-year in December, down from 10.1% in November and 10.6% in October, giving an average of 10% for the quarter.

The ECB watches labour costs to determine how much of the energy price shock caused by the Russian invasion of Ukraine filtered through to other areas of the economy and whether rampant inflation becomes entrenched.

Euro zone wages grew fastest in construction, up 6.5% in the fourth quarter against the same period of 2021, followed by services, where pay rose 5.7% with industry up only 4.4%.

(Reporting by Jan Strupczewski)