Industrial production rose more than expected in July and wage growth picked up in the second quarter, the European Union's statistics office said today.
Eurostat said industrial production in the 13 countries using the euro rose 0.6 per cent month-on-month, up from an upwardly revised reading of no change in June.
In year-on-year terms, industrial output gained 3.7 per cent in July after an upwardly revised 2.4 per cent increase in June.
Eurostat also said the growth of nominal hourly labour costs in the 13 countries using the euro picked up again in the second quarter to an annual 2.5 per cent from an upwardly revised 2.3 per cent in the first three months.
Wages grew by 2.5 per cent year-on-year in the second quarter, up from 2.3 per cent in the first. Social contributions and taxes paid by employers as part of the wage package rose 1.8 per cent, slowing from 1.9 per cent.
The European Central Bank carefully watches wage growth because of its role in building up inflationary pressures and has said wages should expand in line with productivity.
The ECB has signalled it will raise interest rates from the current 4.0 per cent to stem price growth pressures in the robust euro zone economy.
It left them unchanged last week to help calm markets, in turmoil because of a global credit crunch. The monthly increase in industrial production was driven mainly by intermediate goods and non-durable consumer goods, while consumer durables fell 0.1 per cent against June.
In annual terms capital goods production rose the most, followed by intermediate goods and non-durable consumer goods.