FRANKFURT (MNI) – Eurozone unit labour-cost growth remained broadly
stable in the second quarter, with compensation rising and productivity
slipping back, the Organisation for Economic Cooperation and Development
said on Thursday.

After slowing to +0.3% in 1Q, labour-cost growth picked up modestly
to a seasonally-adjusted +0.4% on the quarter in 2Q. The OECD area
average came to +0.3% q/q from 1Q’s +0.8% rate.

Labour compensation per unit of input in the Eurozone recovered
0.2% in 2Q, while labour productivity fell back by the same amount.

Within the monetary union, the strongest jumps were noted in
Estonia (+2.7% q/q), Italy and Finland (both +2.0%). Only Spain (-0.7%),
Slovenia (-0.4%) and the Netherlands (-0.1%) had reported declines.

While countries in the Eurozone periphery have suffered through
significant employment declines, unit labour productivity has risen,
resulting in downward pressure on unit labour costs, the OECD noted.
Should this trend continue, competitiveness within the periphery should
benefit, thereby helping to unwind the imbalances within the Eurozone.

In the U.S., unit labour costs were up 0.4% on the quarter, 0.8
percentage point slower than in 1Q, as higher productivity more than
offset the decline in labour compensation. Conversely, British unit
labour costs jumped 2.4% over the same period, driven by higher
compensation and falling productivity.

— Frankfurt bureau: +49 69 720 142; email: —

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