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Unit labour costs for OECD area rose by 0.3% in the second quarter of 2012

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20/09/2012 - Unit labour costs (ULCs) in the OECD area rose by 0.3% in the second quarter of 2012, driven by continued increases in labour compensation per unit of labour input.

In the United States, ULCs increased by 0.4% in the second quarter of 2012 (down from 1.2% in the previous quarter), with increases in labour productivity (0.2%) more than offset by increases in labour compensation per unit of labour input (0.7%). In the euro area, ULCs rose by 0.4% in the second quarter of 2012 (0.3% in the first quarter), with labour compensation per unit of labour input rising by 0.2% coupled with falling labour productivity by 0.2%. In the United Kingdom, strong increases in labour compensation and negative labour productivity growth continued to drive up ULCs.

Since the beginning of the financial crisis, unit labour costs (ULC) in the euro area have risen by about 9%, 3 percentage points higher than the OECD average. Rebalancing between euro area countries has in most cases been on the way since the beginning of 2009, however. In Ireland, Spain and Portugal, ULCs have continued to fall or remain moderate, mainly driven by labour productivity growth as a result of significant cuts in employment. In contrast, ULCs increased in Germany, France, Finland and Austria, driven by increased labour compensation and largely unchanged labour productivity growth.

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