According to the report from Eurostat, in the first quarter of 2021, the hourly labour costs rose by 1.5% in the euro area and by 1.7% in the EU, compared with the same quarter of the previous year. In the fourth quarter of 2020, hourly labour costs increased by 2.8% and 3.2% respectively.

The two main components of labour costs are wages & salaries and non-wage costs. In the euro area, the costs of wages & salaries per hour worked grew by 2.2%, while the non-wage component dropped by 0.9% in the first quarter of 2021, compared with the same quarter of the previous year. In the fourth quarter of 2020, the annual changes were +3.5% for wages & salaries and +0.8% for the non-wage component. In the EU, the costs of hourly wages & salaries increased by 2.6% and the non-wage component decreased by 1.0% in the first quarter of 2021. In the fourth quarter of 2020, the annual change in wages & salaries was +3.8% and for the non-wage component +1.1%.

In both the EU and the euro area, the non-wage component moderated the growth in hourly labour costs, in particular due to the tax reliefs and subsidies granted by EU governments to support enterprises affected by the crisis.