Jan 28 (Reuters) - Italian wages in 2012 grew at less than half the rate of consumer price inflation, data showed on Monday, helping to explain the worst slump in consumer spending for more than half a century.
Annual wage inflation edged up to 1.7 percent in December from 1.6 percent the month before, data showed on Monday, continuing a gradual upwards trend to post its highest rate since October 2011.
But that was still well below the annual inflation rate, which stood at 2.6 percent in December, based on Italy's EU-harmonised price index.
Over the whole of 2012, wages rose at an average rate of 1.5 percent from the year before, national statistics office ISTAT reported, compared with an average CPI rate of 3.3 percent.
Wage inflation in 2012 was the lowest since the start of the historic series in 1983, ISTAT said. It added that the negative gap between wages and consumer price inflation last year was the widest since 1995.
Declining purchasing power has eroded consumer morale, causing what retail associations and think-tanks say is the deepest decline in consumer spending since World War Two.
The euro zone's third largest economy has been in recession since the middle of 2011 and most analysts expect gross domestic product to fall around 1 percent this year, following a contraction of around 2 percent in 2012.
On a month on month basis, wages rose 0.1 percent in December, the same increase as was registered in November.
Data earlier on Monday showed that consumer morale in January plunged to its lowest level since the series began in 1996, just a month before Italians go to the polls to elect a successor to Mario Monti's technocrat government.
ISTAT gave the following data:
ITALY HOURLY WAGE INDEX DEC NOV OCT
Month/month change 0.1 0.1 0.2
Year/year change 1.7 1.6 1.5
Index (base 2005=100) 118.2 118.1 118.0
(Gavin Jones, Rome newsroom +39 06 8522 4350, fax +39 06 854 0568, firstname.lastname@example.org)
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