Euro zone wage costs rise at second highest recorded rate

Reading Time: 2 minutes

BRUSSELS, Sept 15 (Reuters) – Wages and salaries in the euro zone rose at the second highest recorded rate in the April-June period, confirming that spiralling inflation is leading to higher labour costs, a headache for the European Central Bank.

Hourly wage costs increased by 4.1% in the second quarter of 2022, up from 3.7% in the first quarter, EU statistics office Eurostat said on Thursday.

In data stretching back to 2010, the only higher figure was the 5.2% of the second quarter of 2020, when government support schemes were propping up parts of the labour market during the height of the coronavirus pandemic.

Overall, labour costs rose by 4.0% in the second quarter.

The European Central Bank raised its key interest rates by an unprecedented 75 basis points a week ago and promised further hikes to fight inflation even as the block appears set for a winter recession and gas rationing.

Inflation jumped to 9.1% in the euro zone in August, far about the ECB’s 2% target.

Separately on Thursday, Eurostat reported that the euro zone’s external goods trade balance was a deficit for a ninth consecutive month, at 34.0 billion euros ($33.95 billion) in July, compared with a 20.7 billion euro surplus in July 2021.

In the year to July, the deficit has risen to 177.4 billion euros, compared with a surplus of 121.3 billion euros for the first seven months of 2021.

The switch from surplus to deficit is the result of the bloc’s soaring bill for imports of energy and other raw materials.

For the wider 27-nation European Union, payments for energy imports have risen by 152% for Jan-July. Russia has been one of the chief beneficiaries, despite EU efforts to wean itself off Russian supplies over Moscow’s invasion of Ukraine. Imports from Norway have also increased sharply.

On a seasonally adjusted basis, the euro zone trade balance in July was a negative 40.3 billion euros, its lowest level in data stretching back to 1999.

($1 = 1.0016 euros)

(Reporting by Philip Blenkinsop, Editing by Charlotte Van Campenhout)

Once you're here...

%d bloggers like this: