Euro area labor cost up by 4.2 pct in Q2: Eurostat

The hourly labor costs rose by 4.2 percent in the eurozone, and by 4.1 percent in the European Union (EU) in the second quarter (Q2) of 2020, compared to the same period in 2019, according to the EU’s statistical office Eurostat on Tuesday.

In the first quarter of 2020, the year-on-year rise was 3.7 percent in the eurozone and 3.9 percent in the EU, said Eurostat.

The cost of wages and salaries for per hour worked increased by 5.2 percent, while non-wage components grew only by 0.8 percent in the eurozone, and respectively by 5.3 percent and 0.1 percent in the EU, during the second quarter of 2020, a period that was marked by a hard lockdown to fight the COVID-19 pandemic, inducing a substantial decrease in the amount of worked hours.

According to Eurostat, the increase in hourly wage costs indicates that the decrease in the number of hours worked was not fully compensated by a matching decrease in wages.