The unfavourable situation in the Polish labor market continued in January amid a decline in real wages and a decrease in employment in year-on-year terms. Nominal wages slowed down visibly in January, from 2.4%y/y in December 2012 to 0.4%y/y, the lowest rate since 2003 and the scale of this slowdown was larger than consensus expected. As a result, wages in real terms declined by 1.3%y/y after 0.0%y/y in December, despite the pronounced decrease in inflation (to 1.7% in January from 2.4% in December). Employment fell by 0.8%y/y, marking the third consecutive month of negative employment dynamics, in line with consensus expectations. In the months ahead employment is likely to turn even more negative as economic slowdown depresses demand for workers. The today released figures are in line with further monetary policy easing in Poland: we continue to expect another 25bp rate cut at the March meeting.
Poland, Gross wages in corporate sector (Jan): 0.4%y/y
Previous (Dec): 2.4%y/y
Consensus: 1.0%y/y, KBCS forecast: 0.3%y/y
Poland, Employment in corporate sector (Jan): -0.8%y/y
Previous (Dec): -0.5%y/y
Consensus: -0.9%y/y, KBCS forecast: -0.8%y/y