ENG-2002 — Page 91

THE ECONOMY

Overall labour earnings fell by 1.5 per cent in money terms in the third quarter of 2002 over a year earlier, larger than the declines of 0.6 per cent and 1.0 per cent respectively in the first and second quarters. Yet discounting an enlarged fall in consumer prices, overall labour earnings still gained by 2.1 per cent in real terms in the third quarter of 2002 over a year earlier, which was similar to the increases of 2.1 per cent in the first quarter and 2.2 per cent in the second quarter. For the first three quarters of 2002 as a whole, overall labour earnings declined on average by 1.0 per cent in money terms over a year earlier, but were still up by 2.1 per cent in real terms. In 2001, overall labour earnings were higher both in money terms and in real terms, by 1.8 per cent and 3.5 per cent respectively. On a seasonally adjusted quarter-to- quarter comparison, overall labour earnings edged down by 0.3 per cent in money terms in the third quarter of 2002, similar to the decreases of 0.2 per cent in the first quarter and 0.3 per cent in the second quarter. In real terms, they moved up by 0.5 per cent in the third quarter of 2002, having risen by 0.7 per cent in the first quarter and 0.6 per cent in the second quarter.

Overall labour wages in the private sector fell by 1.5 per cent in money terms in September 2002 over a year earlier, again exceeding the declines of 0.8 per cent in March and 0.9 per cent in June. Discounting an enlarged drop in consumer prices, overall labour wages nevertheless moved higher by 2.8 per cent in real terms in September 2002 over a year earlier. This came after increases of 1.2 per cent in March and 3.1 per cent in June. For the first nine months of 2002 as a whole, labour wages fell on average by 1.1 per cent in money terms over a year earlier, yet still went up by 2.4 per cent in real terms. In 2001, labour wages rose both in money terms and in real terms, by 0.8 per cent and 3.4 per cent respectively (Chart 16).

Chart 16

Earnings and wages

(year-on-year rate of change in money terms)

Per cent

12

10

8

6

Wages

2

0

-2

Earnings

QI Q2 Q3 Q4 Q1 Q2 Q3 Q4 QI Q2 Q3 Q4 Q1 Q2 Q3 Q4 QI Q2 Q3 Q4 Q1 Q2 Q3

1997 1 1998

1999

2000

2001 1 2002

Amidst the slack labour market conditions, overall labour earnings and wages showed renewed decreases in money terms in the first three quarters of 2002 over a year earlier, although they were still up in real terms.

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