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Euro zone wages rose in Q3 99 as growth picked up

BRUSSELS: Wages across the euro zone rose in the third quarter of last year at their highest annual rate since 1997 as growth recovered in nearly all countries, data released by Eurostat showed on Friday.

Total hourly earnings in all sectors rose by 2.2 percent on an annualised basis, up from a 2.0 percent rate in the prior two quarters and at their briskest pace since a 2.6 percent rate registerd in the final months of 1997.

In industry, total labour costs rose at a 2.2 percent rate, up from 1.8 percent in the second quarter and 2.1 percent in the first quarter. That was also the fastest increase since the final quarter of 1997, the data showed.

Total hourly labour costs grew fastest in the Netherlands (3.4 percent) and Finland (3.2 percent).

Growth was slowest in Italy (at 0.5 percent), where cuts in employer social security contributions in 1998 continued to hold down the rise in total wage bills.

Revised gross domestic product (GDP) data released separately confirmed the Netherlands and Finland were among the fastest growing euro zone economies in the third quarter.

Dutch GDP rose by 1.1 percent quarter on quarter and by 4.0 percent year on year. Finnish GDP was up 0.7 percent and 2.8 percent respectively.

Eurostat left unrevised its headline estimates of the rise in euro zone GDP at 1.0 percent quarter-on-quarter and 2.3 percent year-on-year.

Data for all countries - including Ireland and Portugal - was not available.

The headline figure, however, masked downward revisions to government spending and domestic demand components and upward revisions to the contribution to GDP from gross fixed capital formation and exports.

In its monthly report published on Thursday the European Central Bank singled out possible wage inflation as one of its main worries.

The report went to press before Germany's main metalworkers and banking unions announced 5.5 percent pay claims-Reuters