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OECD Unit labour costs up 0.6 % in the fourth quarter of 2012

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21/03/2013 - Growth in Unit labour costs (ULCs) in the OECD area accelerated to 0.6% in the fourth quarter of 2012, compared to 0.2% in the third quarter. Overall, growth in labour compensation per unit of labour input slowed marginally (to 0.3% compared to 0.4% in the third quarter). But this was more than offset by a significant slowdown in labour productivity (minus 0.3% compared to plus 0.2% in the previous quarter).

The same factors, marginally slowing wage growth but declining productivity growth, drove ULCs in the Euro area (up 0.5%), the United States (1.0%) and Canada (0.4%). Labour productivity fell in the United States (minus 0.6%), Canada (minus 0.4%) and the Euro area (minus 0.3%).

Since the beginning of the financial crisis, ULCs in the Euro area have risen by about 10%, 3 percentage points higher than the OECD average. Some rebalancing continued among countries in the Euro area: whereas the rise in ULCs in Germany to the fourth quarter of 2012 was 1.3%, ULCs rose by 1.0% in Italy, by 0.6% in France and Portugal, and declined in Spain (minus 3.1%). Increases in ULCs were typically due to weak productivity growth combined with rising wages; the decline in ULC levels in Spain reflected significant wage cuts in combination with rising productivity.

‌ Source: OECD Early Estimates of Quarterly ULC Indicators – Total economy