Eurozone hourly labor costs dropped slightly in the second quarter, data from Eurostat showed on Wednesday.
Hourly labor cost fell 0.1 percent on yearly basis, in contrast to the 1.3 percent increase registered in the first quarter.
The two main components of labor costs are wages and salaries and non-wage costs. The costs of wages and salaries per hour worked dropped 0.4 percent, while the non-wage component rose 0.8 percent.
The fall in euro-zone average hourly labor costs in the second quarter compared to a year earlier was mainly due to pandemic-related distortions to the data that will continue to muddy the picture for another couple of quarters, Jessica Hinds, an economist at Capital Economics, said.
Nevertheless, the spare capacity in the labor market will keep wage growth subdued, the economist added.