MNI BRIEF: More EZ Consumers View Wages as Inflation Driver
MNI (LONDON) - Euro area consumers have increasingly identified wages as a primary driver of inflation, according to extended data from the ECB’s Consumer Expectations Survey published as an Economic Bulletin Tuesday. When asked to pinpoint the main cause of the inflation surge in 2022-2023, survey participants in both June 2023 and March 2024 could select from three options: wages, corporate profits, and “other inputs,” which included energy and raw material costs.
In June 2023, “other inputs” were selected by 66% of respondents, while 20% pointed to profits and only 14% chose wages. However, by March 2024, the share attributing inflation to wages rose by six percentage points, with corresponding decreases in the other two factors, the bulletin showed. This trend was consistent across euro area countries, though national variations did exist. The Netherlands and Belgium recorded the highest percentage of respondents selecting wages in the initial survey, partly due to indexation of wage increases.
According to the ECB, consumers who view wages as the leading inflation factor tend to be younger, lack college education, and reside in countries with relatively high wage growth.