Unit labour costs in OECD countries continued to rise in fourth quarter of 2008

by S. C.

Largely driven by falls in real output (gross domestic product at constant prices) due to the crisis, unit labour costs for the total economy rose 0.9% for the OECD area in the fourth quarter of 2008 and were up 2.9% year on year. The group of the major seven economies and the Euro area display similar aggregate trends.

Unit labour costs rose 1.0% in the market services sector for the OECD area in the fourth quarter of 2008 and 2.7% on an annual basis. Among the major seven economies, unit labour cost growth rates in market services only increased in the United States (1.3%) and Japan (0.8%) in the fourth quarter.

In industry, unit labour costs for the OECD area continued to grow at a stable rate of 1.2% in the fourth quarter of 2008; 3.9% year on year. Among the major seven economies, Italy had the highest growth rate in industry with 2.2% in the fourth quarter, accumulating to 7.3% on an annual basis. Growth in Japanese industry unit labour costs slowed to 0.4% in the fourth quarter of 2008 from the 0.5% growth recorded in the previous quarter. Unit labour costs in German industry increased 0.3% in the fourth quarter of 2008 compared with 0.6% in the third quarter.