Wages in the Eurozone rebounded during the first three months of the year but remained weak, however, to provide any support to the European Central Bank in meeting its 2 percent targeted rate of inflation.
The euro area wages peaked 1.8 percent in the first quarter compared to the same period a year ago. This pushed overall labor costs in the economy by 1.7 percent. In both the cases, there was a pickup from the rates of growth seen in the final six months of 2015. However, wage growth remained below the rates seen at the start of 2015, when pay increased by over 2 percent, an indication that euro zone inflation is unlikely to pick up in the near term.
The unemployment rate in the euro area has witnessed a steady fall through, since its recovery in mid-2013. Over the 12 months to the end of April, the number of people without work declined by 1.309 million, as the jobless rate fell to 10.2 percent from 11 percent.
"In the midst of what one would qualify as good news as far as growth and employment are concerned, we still see no substantial pressures on the wage and price-setting mechanisms, with the possible exception of Germany," said Mario Draghi, President, ECB.
Euozone’s growth kicked off in the three months ending March 2016, that outpaced both that in the United Kingdom and United States. But instead of rising more rapidly as the ECB would wish as it seeks to meet its inflation target of just below two percent, consumer prices have remained subdued, and were lower than a year earlier in both April and May.
Meanwhile, data released by the Eurostat, showed German wages rose at an annual rate of 3.2 percent in the first quarter, double the rate recorded in the final three months of last year. But there were more modest rises of 1.6 percent in France followed by 0.7 percent in Spain, while Italian wages fell by 0.1 percent.
