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Both labour costs and monthly wages increased throughout the Eurozone, data released by the European Union’s statistics agency yesterday revealed, indicating that inflationary pressures in the eurozone may be set to pick up.

Figures published by Eurostat indicated that the region’s job vacancy rate was unchanged at 1.7%, suggesting that the unemployment rate is unlikely to fall significantly in coming months. 

Eurostat said workers' pay was 1.2% higher in the second quarter than in the same period of 2013, having risen by 1.0% in the three months to March. 

Total labor costs - which include tax and other costs to employers - rose 1.2%, having increased by 0.6% in the previous period.

“The pickup in wages and total labor costs will give some encouragement to members of the European Central Bank's governing council, since it suggests underlying inflationary pressures may be on the rise, albeit slowly,” MarketWatch reports. 

The eurozone's annual rate of inflation fell to 0.3% in August from 0.4% in July, taking it further below the ECB's target of just below 2%.

A number of eurozone members recorded wage declines during the second quarter: Cyprus recorded the largest decrease, with wages down 4.5%, though there were also falls in Ireland, Italy and the Netherlands. 

Wages rose 1.6% in Germany, and slightly less rapidly in Spain.

“That suggests that the eurozone continues to rebalance through different rates of wage growth. Deprived of the ability to devalue their currency, troubled eurozone members have tried to regain competitiveness lost in the years running up to the financial crisis by cutting their labor costs relative to stronger northern European economies, a process known as internal devaluation,” comments MarketWatch.