Free Trial

EUROZONE DATA: One-off German Deals Expected To Skew Q3 Negotiated Wages Higher

EUROZONE DATA

Euro-area Q3 negotiated wage growth, due Wednesday, is expected to print between 5-6% Y/Y according to a handful of analyst estimates we have seen. This would be a marked uptick from the 3.5% Y/Y in Q2, but is largely due to one-off effects in Germany. 

  • Negotiated wage growth is expected to fall back in Q4 (Citi expect 3.75% Y/Y), not least due to last week’s IG Metall Union and Gesamtmetall pay deal. Analysts have generally viewed the deal as weaker than would have been expected by the ECB.
  • As such, the ECB can probably afford to look through the uptick in Q3 negotiated wages, placing more focus on Friday’s November flash PMIs as a timely indicator of economic activity.
  • A reminder that the October Indeed wage tracker indicated a broad-based deceleration of posted wager growth across the four major Eurozone economies. See here.
  • Tomorrow, preliminary Q3 labour cost data is due. However, this series can be prone to revisions, with Eurostat needing to estimate many inputs (e.g. compensation and hours worked) using flash/incomplete data from member states.

 

174 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.

Euro-area Q3 negotiated wage growth, due Wednesday, is expected to print between 5-6% Y/Y according to a handful of analyst estimates we have seen. This would be a marked uptick from the 3.5% Y/Y in Q2, but is largely due to one-off effects in Germany. 

  • Negotiated wage growth is expected to fall back in Q4 (Citi expect 3.75% Y/Y), not least due to last week’s IG Metall Union and Gesamtmetall pay deal. Analysts have generally viewed the deal as weaker than would have been expected by the ECB.
  • As such, the ECB can probably afford to look through the uptick in Q3 negotiated wages, placing more focus on Friday’s November flash PMIs as a timely indicator of economic activity.
  • A reminder that the October Indeed wage tracker indicated a broad-based deceleration of posted wager growth across the four major Eurozone economies. See here.
  • Tomorrow, preliminary Q3 labour cost data is due. However, this series can be prone to revisions, with Eurostat needing to estimate many inputs (e.g. compensation and hours worked) using flash/incomplete data from member states.