Eurozone Labor Cost Growth Exceeds Expectations

RTTNews | 33 days ago
Eurozone Labor Cost Growth Exceeds Expectations

(RTTNews) - The euro area hourly labor cost growth accelerated more than expected in the first quarter, which aligns with trends revealed by other indicators and the European Central Bank's view that wage pressures are set to remain elevated for some time before entering a downward trajectory next year.

Hourly labor cost grew at a faster pace of 5.1 percent on a yearly basis, which was faster than the 3.4 percent increase seen in the fourth quarter of 2023, data published by Eurostat showed on Monday. The rate was also faster than economists' forecast of 4.9 percent.

Wages and salaries and non-wage costs, the two main components of labor costs, grew 5.3 percent and 4.5 percent, respectively.

In services, hourly labor costs gained 5.0 percent and those in construction climbed 5.2 percent. Labor costs in industry grew 4.8 percent.

Data showed that hourly labor costs in the EU increased 5.5 percent after a 4.1 percent gain a quarter ago.

The biggest increases in hourly wage costs for the whole economy were recorded in Romania, Bulgaria and Croatia.

Last month, an indicator from the European Central Bank showed that negotiated wages rose 4.7 percent year-on-year in the first quarter, which was faster than the 4.5 percent increase in the previous three months.

The ECB has said wage pressures remain elevated in the euro area but are likely to ease next year.

"This negatively-sloped profile for wage growth helps to underpin the projected decline in inflation in 2025, with less pressure from labor costs next year," ECB Chief Economist Philip Lane said last week.

ECB policymakers have said that wage is primarily driven by the ongoing adjustment to the past inflation surge.

The ECB lowered interest rates by 25 basis points earlier this month, taking the refi rate to 4.25 percent. This was the first reduction since 2019. Economists expect one more ECB rate cut this year.

read more
German Building Permits Post Sharp Decline In May

German Building Permits Post Sharp Decline In May

Germany's building permits posted another sharp decline in May, reflecting the ongoing weakness in the construction sector, data from Destatis showed on Thursday. The number of permits for construction of apartments shrank 24.2 percent in May from the last year, which was worse than the 17.0 percent decrease posted in April.
RTTNews | 2 days ago
ECB Pauses Rates Ahead Of Likely September Cut

ECB Pauses Rates Ahead Of Likely September Cut

The European Central Bank left its key interest rates unchanged on Thursday, as expected, after lowering them for the first time in five years in the previous session, as policymakers head into a summer break ahead of a possible rate reduction in September even as they worry about the sticky inflation.
RTTNews | 2 days ago
Eurozone Inflation Slows To 2.5% As Estimated

Eurozone Inflation Slows To 2.5% As Estimated

Eurozone inflation slowed as initially estimated in June but the European Central Bank is expected to hold its benchmark rate on Thursday as underlying inflation remains too high. The harmonized index of consumer prices rose 2.5 percent on a yearly basis, which was slower than the 2.6 percent growth posted in May. The 2.5 percent matched the flash estimate published on July 2.
RTTNews | 4 days ago
German Economic Sentiment Falls For First Time In A Year

German Economic Sentiment Falls For First Time In A Year

German economic confidence declined for the first time in a year in July amid weak exports, political uncertainty and the lack of clarity about the future monetary policy, survey data from the ZEW economic research institute showed Tuesday. The economic sentiment index fell sharply to a four-month low of 41.8 in July from 47.5 in the previous month. The score was forecast to drop moderately to 41
RTTNews | 5 days ago
Eurozone Industrial Output Falls Less Than Expected

Eurozone Industrial Output Falls Less Than Expected

Eurozone industrial production dropped for the first time in four months in May, though at a slower than expected pace, official data showed on Monday. Industrial output logged a monthly fall of 0.6 percent after remaining flat in April, the statistical office Eurostat said. Production was forecast to decline by 1.0 percent.
RTTNews | 5 days ago
German Exports Fall For First Time In 3 Months

German Exports Fall For First Time In 3 Months

Germany's exports declined for the first time in three months in May as demand from China and the United States weakened, data published by Destatis showed on Monday. Exports posted a monthly fall of 3.6 percent, in contrast to the 1.7 percent increase in April. At the same time, imports declined more deeply by 6.6 percent, reversing a 1.2 percent rise in April.
RTTNews | 13 days ago
Eurozone Retail Sales Rise In May

Eurozone Retail Sales Rise In May

Eurozone retail sales increased in May after falling a month ago but the pace of growth was weaker than forecast, official data showed on Friday. Retail sales edged up 0.1 percent on a monthly basis in May following a 0.2 percent drop in April, Eurostat said. Sales were expected to climb 0.2 percent. Sales of food, drinks and tobacco posted a monthly increase of 0.7 percent.
RTTNews | 16 days ago
German Industrial Output Logs Unexpected Decline

German Industrial Output Logs Unexpected Decline

Germany's industrial production declined unexpectedly in May suggesting that the economy is losing steam, official data revealed on Friday. Industrial production posted a monthly decline of 2.5 percent in May, reversing a revised 0.1 percent rise in April, Destatis reported. Output was expected to grow 0.2 percent.
RTTNews | 16 days ago