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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.
EUROZONE DATA
The Eurozone Indeed Wage tracker fell in November to a 3.7% 3MMA annualised rate. This represents the 7th consecutive month that the indicator has softened. The tracker peaked at 5.2% in October 2022.
- This metric is used by the ECB as a real-time monthly gauge of wage pressures, alongside more backward looking official Eurostat data, most of which is reported at a quarterly frequency.
- At a country level, wages/salaries in job postings were seen falling in Germany, France and Spain (the Italian data from Indeed is incomplete), with Spain's deceleration lagging most notably.
- The data is somewhat at odds with the release of the Eurozone harmonised labour cost index which accelerated to 5.3% Y/Y in Q3 (vs 4.7% in Q2). The rise was driven by Germany, with both services and industrial sector labour costs rising substantially in Q3. The most encouraging developments were seen in France, while Italian services costs also softened to 2.2% Y/Y (vs 3.1% in Q2).
- Wage growth is now at the forefront of the ECB's concerns re: 2024 policymaking. The December monetary policy statement included an explicit reference to unit labour costs as a driver of domestic price pressures.
- Additionally, comments from Vasle, Wunsch, Muller and Reuters' ECB sources in recent days have all stressed the importance of Q1 '24 wage data in determining the extent to which the ECB can consider pivoting from their current rate stance of "sufficiently restrictive levels for as long as necessary".
- Further decelerations in more real-time indicators like the Indeed tracker will be necessary conditions for the ECB to bring forward any discussion r.e. rate cuts, but corroboration from official quarterly sources will likely also be a prerequisite for any policy pivot.
| Eurostat Labour Cost Index Y/Y | Euro Area | Germany | Spain | France | Italy |
| Overall | |||||
| 2023-Q3 | 5.3 | 5.6 | 5.7 | 3.2 | 3.3 |
| 2023-Q2 | 4.7 | 3.7 | 5.6 | 4.3 | 2.5 |
| Services | |||||
| 2023-Q3 | 5.6 | 6.0 | 5.8 | 4.0 | 2.2 |
| 2023-Q2 | 5.2 | 3.7 | 6.4 | 4.5 | 3.1 |
| Industry ex services and construction | |||||
| 2023-Q3 | 5.8 | 5.8 | 4.9 | 4.2 | 4.9 |
| 2023-Q2 | 4.2 | 2.5 | 4.9 | 4.7 | 3.9 |
Source: Indeed.com, MNI
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.
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