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Italy ULCs Moderate, But ECB Focus Remains On Q1 Data


Italian real productivity per hour worked remained sluggish in Q4 2023, which pushed unit labour costs (ULCs) higher on a quarterly basis. However, a softening of annual total compensation growth meant both ULCs and the GDP deflator moderated Y/Y (to 2.9% Y/Y and 4.0% Y/Y respectively).

  • For the ECB, the moderation of ULC and the GDP deflator in Italy will be taken alongside less favourable figures in other major EZ countries (e.g. in Germany and Spain, annual ULC growth remains above 6% Y/Y while GDP deflator growth is above 5% Y/Y).
  • Despite this, the Q4 data is likely to be discounted in favour of looking ahead to the Q1 2024 figures at tomorrow's meeting.
  • The updated macroeconomic projections will give an insight into the ECB's current view of the deflator components.
  • The full Eurozone Q4 national accounts will be released on Friday March 8 at 1000GMT/1100CET.
  • See the following PDF for our recent piece on EZ ULC and GDP deflator trends:

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