Eurozone labor costs up 5.7% year-on-year in Q4

BRUSSELS-Eurozone labor costs surged in the last three months of 2022, with third-quarter data also revised upwards, but the rise in the wage component is still about half the rise in consumer inflation was shown in the data on Friday.

According to Eurostat, the European Union’s statistical office, labor costs in the 19 euro-sharing countries rose 5.7% year-on-year in the fourth quarter of 2022, wages rose 5.1%, and non-wage labor costs rose 5.1%. rose 7.7%.

Labor costs were revised up to 3.7% y/y from the previously reported 2.9%, while wage growth was revised up to 3.0% from 2.1%.

The consumer price index was 9.2% y/y in December, down from 10.1% in November and 10.6% in October, averaging 10% for the quarter.

Eurozone wages grew fastest in construction, up 6.5% in the fourth quarter compared to the same period in 2021, followed by services, with wages up 5.7%, and industry, up just 4.4%. .

The ECB monitors labor costs to see how much energy price shocks caused by the conflict in Ukraine are affecting other sectors of the economy, and excludes volatile energy and food prices, the so-called Rising core inflation is determining whether rampant inflation is taking hold.

Core inflation rose to 5.6% y/y in February from 5.3% in January, putting it on track to match rising labor costs. under.

Headline inflation will average 5.3% this year, 2.9% in 2024 and 2.1% in 2025, the ECB said, adding that these projections are ahead of the current turmoil linked to the US SVB bank failure and stock prices. It added that it was finalized. Credit Suisse Trouble in Europe.

ECB policymakers say wage increases in the 5-6% range this year are only a catch-up after inflation eroded the real value of Still out of line with the 2% inflation target.