Wages up in Germany

In nominal terms, the monthly wages of fully-employed Germans rose by an average 3.3 percent in 2011, according to figures published by the German statistics authority Destatis on Monday.

Destatis noted that inflation over the same period was 2.3 percent on average, meaning that real earnings increased by 1 percent.

The increase in monthly wages was particularly strong in the first two quarters of 2011, as companies scaled back short-time working on the back of robust economic growth in Germany. In addition, trade unions in the country were able to negotiate 4 percent higher wages on average and one-time bonus payments for employees.

Inflation toll

In the second half of the year, Destatis noted that the rise in nominal wages slowed considerably due to the German economic slowdown.

While real earnings recorded a small increase of 0.5 percent in the third quarter, they actually declined by 0.2 percent in the period from October to December. An inflation rate of 2.3 percent in that quarter reversed the trend of rising real incomes.

Decreasing fourth-quarter wages corresponded with a drop in German retail sales figures. In December, one of the most important months for retailers, sales declined by 1.4 percent compared with the previous month.

"The figures are all the more disappointing as disposable incomes were rising [in 2011] and the labor market situation is still favorable," Commerzbank analyst Ulrike Rondorf told the AFP news agency.

Rondorf expects private consumption to grow by "an estimated 1.25 percent" in 2012, as employment and wages continue to rise.

In 2010, real incomes in Germany rose by 1.5 percent, compared with a 0.4 percent decline in 2009.

uh/cmk (AFP, dpa)