FRANCE DATA
French nominal wages increased in Q4 2023 by +0.3% Q/Q (vs +0.5% prior) and +3.8% Y/Y (vs +4.2% prior). This was the fourth consecutive slowdown in the Y/Y rate, but nonetheless marks the first time in the current cycle that the yearly wage growth rate exceeded the average CPI inflation rate (3.7% Y/Y) of the respective quarter.
- Looking at the individual sectors, wage growth developments were fairly uniform, with industrial wages excl. construction and services wages rising +0.3% Q/Q (vs +0.5% prior, both), and construction wages at +0.2% Q/Q (vs +0.4% prior).
- The official Q4 growth rate largely mirrors the monthly data from the Indeed.com wage tracker, which printed at +3.6% Y/Y (+4.0% prior) in December 2023.
- Wage growth in France has been softer than in some Eurozone peers since the beginning of 2023, which has allowed French unit labour costs to remain relatively in-line with others despite poor productivity.
- That intersection between wage growth and productivity will be a key to unlocking ECB rate cuts, as stressed again by ECB's Lane and Schnabel in recent interviews and panel discussions.
- Additionally the nascent pickup in French real wage growth will be eyed as a constructive macro factor, with ECB President Lagarde noting in January's press conference: "one of the reasons why we see [Euro area] growth coming up and the recovery beginning in the course of 2024; because of rising wages while inflation comes down, which will free up some purchasing power, which hopefully will stimulate consumption."
MNI, Indeed.com, Ministry of Labour
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