INSTANT VIEW 3-Czech Q1 real wage growth quickens to 3-yr high

...highlighting a rise in consumer spending power, which 
analysts say may help stoke inflationary pressures. 
     
KEY POINTS: 
(y/y change in pct)    Q1/07    Q4/06      2006      2005 
 real change            6.2   4.5(4.6)   3.8(3.9)  3.3(3.2) 
 nominal change         7.8   6.1(6.2)   6.4(6.5)  5.3(5.2) 
Note. brackets denote previously reported data 
 
 (Full table of Q4 data...........................[nPRA001325]) 
 
- Gross average wage in the first quarter stands at 20,399 
crowns ($967.7). 
- Average seasonally-adjusted nominal gross wage rises 2.0 
percent in the first quarter from the previous three months. 
 
COMMENTARY: 
    ALES MICHL, ANALYST, RAIFFEISENBANK, PRAGUE 
    "The sharp real wage growth points at an increasingly 
tighter labour market ... The wage numbers may encourage even 
those central bankers who have so far preferred to take a 
wait-and-see attitude. June will be about re-assessing (the 
outlook), but in July interest rates could change (rise) again, 
unless the crown firms unexpectedly." 
     
    RADOMIR JAC, CHIEF ANALYST, PPF ASSET MANAGEMENT, PRAGUE 
    "The acceleration of Czech average wage growth means that 
nominal unit labour costs also increased in the first quarter of 
2007, according to our estimates to 3.2 percent year-on-year, 
which is their sharpest increase since the first quarter of 
2004. The strong wage growth and accelerating unit labour costs 
should support the case for a further increase in the Czech 
National Bank interest rates in 2007: The next interest rate 
hike may be delivered in July and the repo rate may reach 3.25 
by the year-end." 
 
MARKET REACTION: 
- Crown steady at 28.290 per euro  by 0725 GMT. 
 
 BACKGROUND: 
- April producer prices figures                  [ID:nL16385917] 
- April consumer inflation figures               [ID:nL10545694] 
                                                 [ID:nL09317767] 
- March industrial output figures                [ID:nL15302934] 
- Report on last Czech c.bank rate decision      [ID:nPRA001319] 
                                 [ID:nL31276683] [ID:nL31320495] 
  
LINKS: 
- For further details on first-quarter wages and past data, 
Reuters 3000 Xtra users can click on the Czech Statistical 
Bureau's Website: 
    http://www.czso.cz/eng/csu.nsf/kalendar/2004-pmz 
 
- For LIVE Czech economic data releases, click on        
- Instant Views on other Czech data                 [CZ/INSTANT] 
- Overview of Czech macroeconomic indicators            [CZ/ECI] 
 
- Key data releases in central Europe    [CEE-CONVERGENCE-WATCH] 
- For Czech money markets data click on                 
- Czech money guide                                       
- Czech benchmark state bond prices                    
- Czech forward money market rates                       
 
  
 ($1=21.07 Czech Crown) 
  Keywords: CZECH WAGES/