Euro area wages record record high in the first quarter: Eurostat

BRUSSELS (Reuters) – Eurozone wages rose in the first quarter of the year at the fastest pace ever since data collection, data from the EU's statistical office said on Monday.

The increase is a positive sign for the European Central Bank's plans to raise inflation, but it has not yet translated into higher prices in the 19 euro-zone countries.

According to Eurostat, wages and salaries increased by 2.5% in the first three months of the year compared to the same quarter of the previous year, registering the largest increase since 2010, the year when had started collecting data.

Wages increased 2.3% in the previous two quarters.

Wages rose more than the total cost of labor, which rose by 2.4% in the first quarter, Eurostat said.

The non-wage component of labor costs increased by 2.2%, offsetting the increase in labor costs.

Although wages are rising and employment is at record highs, consumer prices have been repeatedly disappointed and underlying inflation remains low, disconcerting policy makers and questioning the central bank's ability to control prices.

In the three-month period of record wage growth, euro area inflation increased by 1.5% in February and 1.4% in January and March, which is far from the ECB's goal of reducing rates but 2%.

In May, inflation slowed to stand at 1.2%, according to the latest figures from Eurostat.