Negotiated wage growth in the Euro Area surged to 5.42% in Q3 2024, the highest increase since Q1 1993, up from 3.54% in Q2. This jump, largely driven by Germany, complicates the European Central Bank’s plans for interest rate cuts as inflation eases. With less than a month before the ECB’s final policy meeting of the year, there are concerns that this wage surge could dampen expectations for aggressive rate reductions in 2025. While the ECB has signaled that further cuts are likely due to weak economic activity, some officials caution against rapid moves, given persistent wage pressures in the services sector. The ECB expects a slowdown in wage growth over the next two years, but high pay increases in Germany, where wages rose by 8.8% in Q3, may limit the scope for future rate cuts. source: European Central Bank

Negotiated Wage Growth In the Euro Area increased to 5.42 percent in the third quarter of 2024 from 3.54 percent in the second quarter of 2024. Negotiated Wage Growth in Euro area averaged 2.50 percent from 1992 until 2024, reaching an all time high of 7.14 percent in the first quarter of 1992 and a record low of 1.13 percent in the third quarter of 2021. This page includes a chart with historical data for Euro Area Negotiated Wage Growth. Euro Area Negotiated Wage Growth - data, historical chart, forecasts and calendar of releases - was last updated on January of 2025.

Negotiated Wage Growth In the Euro Area increased to 5.42 percent in the third quarter of 2024 from 3.54 percent in the second quarter of 2024. Negotiated Wage Growth in Euro area is expected to be 3.40 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. In the long-term, the Euro Area Negotiated Wage Growth is projected to trend around 2.50 percent in 2025 and 2.00 percent in 2026, according to our econometric models.




Calendar GMT Reference Actual Previous Consensus TEForecast
2024-08-22 09:00 AM
Negotiated Wage Growth
Q2 3.55% 4.74% 4.3%
2024-11-20 10:00 AM
Negotiated Wage Growth
Q3 5.42% 3.54% 3.7%
2025-05-23 09:00 AM
Negotiated Wage Growth
Q1 5.42% 2.9%


Related Last Previous Unit Reference
Employed Persons 153.31 153.12 Million Sep 2024
Negotiated Wage Growth 5.42 3.54 percent Sep 2024

Euro Area Negotiated Wage Growth
In the Euro Area, the Negotiated Wage Growth indicator refers to the weighted average of the national year-on-year growth rates of collectively agreed wages. It is designed to capture the outcome of collective bargaining processes and to provide a timely indicator of possible wage pressures (without the effect of wage drift, i.e. the difference between negotiated and actual wages). The data are based on the most suitable and timely available country data (a mixture of monthly and quarterly series): monthly data are available for seven countries (Germany, Spain, Italy, Netherlands, Austria, Portugal and Slovenia, representing 69% of the euro area) and quarterly data for three countries (Belgium, France, Finland, representing 29% of the euro area).
Actual Previous Highest Lowest Dates Unit Frequency
5.42 3.54 7.14 1.13 1992 - 2024 percent Quarterly
NSA


News Stream
Eurozone Negotiated Wage Growth Highest since 1993
Negotiated wage growth in the Euro Area surged to 5.42% in Q3 2024, the highest increase since Q1 1993, up from 3.54% in Q2. This jump, largely driven by Germany, complicates the European Central Bank’s plans for interest rate cuts as inflation eases. With less than a month before the ECB’s final policy meeting of the year, there are concerns that this wage surge could dampen expectations for aggressive rate reductions in 2025. While the ECB has signaled that further cuts are likely due to weak economic activity, some officials caution against rapid moves, given persistent wage pressures in the services sector. The ECB expects a slowdown in wage growth over the next two years, but high pay increases in Germany, where wages rose by 8.8% in Q3, may limit the scope for future rate cuts.
2024-11-20
Eurozone Negotiated Wage Growth Slows in Q2
Negotiated wage growth in the Euro Area slowed to 3.55% in Q2 2024, down from 4.74% in Q1, largely due to a significant slowdown in Germany. This deceleration strengthens the case for another interest rate cut by the European Central Bank in September, alleviating concerns that rising labor costs would continue to fuel inflation. The ECB has emphasized the importance of wage growth in its policy decisions, and this recent slowdown could accelerate the easing of monetary policy. Although the ECB kept rates unchanged in July, markets now see a more than 90% chance of a rate cut in September, with further reductions expected by year-end as economic conditions remain weak. While there are concerns that wage growth could rebound, some economists believe it has peaked and aligns with the ECB’s projections. The ECB's chief economist, Philip Lane, has expressed confidence that wage pressures will continue to ease, especially as wages catch up from previous inflationary losses.
2024-08-22
Eurozone Pay Gains Approach Record High in Q1
Negotiated wage growth in the Eurozone surged to 4.69% year-on-year in Q1 2024, up from 4.45% in the previous period and edging closer to the record 4.7% increase in Q3 2023. This has raised concerns about potential inflationary pressures resulting from escalating wages. The mounting costs could ultimately be transferred to consumers, potentially prolonging inflation levels above 2%. The gauge, which analyzes non-harmonized country data to indicate potential pay pressures, is closely watched by ECB policymakers as they consider when to adjust interest rates. Strong wage growth could complicate ECB's decision-making on rate cuts. While a rate cut is likely in June, hopes for another cut in the next months are diminishing.
2024-05-23