EUROZONE DATA
Eurozone posted wages rose 3.3% Y/Y according to the December Indeed wage tracker (released Wednesday). That sees a full unwind of November’s two-tenth uptick to 3.5%. The 3mma of annual wage growth was steady at 3.3%.
- 3mma annual wage growth across countries: 3.0% Y/Y in Germany (vs 3.3% prior); 1.6% in France (vs 1.4% prior); 3.4% Y/Y in Italy (vs 3.0% prior); and 4.8% in Spain (vs 4.6% prior).
- The estimate was based on a sample of 173k observations. As usual, most observations come from France (101k), with 31k from Germany, 7k from Italy, 3k from Spain and 32k combined from Ireland and the Netherlands.
- An expected easing of wage growth is a key factor behind the ECB’s confidence in the inflation outlook. From yesterday’s December accounts: “Caution was also expressed on the signal from the fall in core inflation, which tended to be volatile. Instead, more weight had to be placed on the ongoing easing of wage pressures. Especially the cooling of the labour market and new information on negotiated wages seemed to confirm the moderation of wage growth”.
- While the Indeed wage tracker remains a useful monthly indicator, it may be less valuable in 2025 compared to last year. First, as Eurozone labour demand (and therefore vacancies) ease, the tracker's sample size naturally falls, potentially reducing reliability. Second, the ECB has begun publishing its forward looking wage tracker on a regular basis. This in-house tracker is likely more important to the ECB’s reaction function, so will be more closely watched by financial markets compared to Indeed.
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