23/06/2015 - Unit labour costs (ULCs) in the OECD area rose by 0.5% in the first quarter of 2015, the same rate as in the previous quarter. Increased compensation costs (up 0.4%) continued to drive ULC growth, albeit at a slower pace than in the last quarter of 2014 (0.6%). Labour productivity growth remained weak turning marginally negative (minus 0.1%) for the first time since the first quarter of 2014.
ULCs accelerated in the United States (by 1.3%) in the first quarter of 2015, compared to 1.0% in the previous quarter. The significant fall in labour productivity (minus 0.8%) drove much of ULC growth, with compensation costs increasing by 0.5% – significantly down on the previous two quarters.
Labour productivity also fell in the United Kingdom (minus 0.3%) but a corresponding, and significant fall in labour compensation costs (minus 1.0%) helped push ULCs down (by minus 0.7%). By contrast, while ULCs also decreased in Japan (minus 0.9%), this reflected a strong pick-up in labour productivity growth (0.8%).
In the Euro area, ULCs increased (by 0.3% compared to 0.2% in the previous quarter), driven by a slight upturn in labour compensation costs (0.5% compared to 0.4%), with labour productivity growth holding steady at 0.2%.
The adjustment in ULCs across the Euro area remains mixed. On the back of robust productivity growth (0.5%), ULCs fell in France (by minus 0.1%) whilst they rose slightly in Germany (by 0.3%). On the other hand, ULCs increased significantly in Greece (1.8%) and Portugal (4.3%), driven by an acceleration in compensation costs (the highest rates since the fourth quarter of 2009 for Greece and the first quarter of 2013 for Portugal).
Early Estimates of Quarterly Unit Labour Costs