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FRANCE DATA: A Beat For Q4 Wages But Still Implies Y/Y Easing Ahead

FRANCE DATA
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France's basic monthly salary (SMB) index was stronger than expected in preliminary Q4 data at 0.4% Q/Q in Q4 (cons 0.3%). It's a second quarter at 0.4% after 0.6% in Q2 and a particularly strong 1.3% in Q1. Y/Y wage growth firmed a tenth on the quarter to 2.8% Y/Y in Q4, sticking recently in the 2.7-2.9% range but with 2H24 trends suggesting some moderation could be seen ahead. 

  • There was a modest sequential firming from the construction sector, at 0.3% Q/Q after 0.2% in Q3.
  • The tertiary sector saw a second consecutive quarter at 0.4% Q/Q, again after those stronger readings of 0.5% in Q2 and 1.3% in Q1.
  • Industrial sector wages meanwhile softened slightly to 0.3% Q/Q (from 0.4% in Q3) - the softest pace of growth seen in 2024.
  • The ECB's in-house wage tracker has been a driving force behind Governing Council confidence in inflation returning to target, pointing to a notable moderation in wage growth ahead.
  • This wage tracker currently lacks country-level detail. For an alternate indicator, the Indeed wage tracker for France has shown greater moderation through 2024 compared to the SMB data above, although has recently firmed a touch to 1.6% Y/Y 3mma in December.  
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France's basic monthly salary (SMB) index was stronger than expected in preliminary Q4 data at 0.4% Q/Q in Q4 (cons 0.3%). It's a second quarter at 0.4% after 0.6% in Q2 and a particularly strong 1.3% in Q1. Y/Y wage growth firmed a tenth on the quarter to 2.8% Y/Y in Q4, sticking recently in the 2.7-2.9% range but with 2H24 trends suggesting some moderation could be seen ahead. 

  • There was a modest sequential firming from the construction sector, at 0.3% Q/Q after 0.2% in Q3.
  • The tertiary sector saw a second consecutive quarter at 0.4% Q/Q, again after those stronger readings of 0.5% in Q2 and 1.3% in Q1.
  • Industrial sector wages meanwhile softened slightly to 0.3% Q/Q (from 0.4% in Q3) - the softest pace of growth seen in 2024.
  • The ECB's in-house wage tracker has been a driving force behind Governing Council confidence in inflation returning to target, pointing to a notable moderation in wage growth ahead.
  • This wage tracker currently lacks country-level detail. For an alternate indicator, the Indeed wage tracker for France has shown greater moderation through 2024 compared to the SMB data above, although has recently firmed a touch to 1.6% Y/Y 3mma in December.  
image