Wage Growth Plateauing (And Broadening) At a High Level (1/2)
The Central Bank of Ireland has published a new data set overnight on wage growth in the eurozone and UK. It will be updated monthly and is different from conventional, less timely official statistics as it is based on 24 million job ads posted on Indeed.com since 2018 (as opposed to ECB data readings based on negotiated wages and national accounts).
- The authors contend that the data reflects labor market tightness, when "vacant jobs are plentiful and available workers are scarce", and also capture the wages of job switchers as a leading indicator, as they "relate to the marginal worker and are likely to reflect employers’ expectations for demand".
- The report suggests that based on incoming job ads, wage growth in Europe may have peaked despite seemingly right labour market conditions.
- UK wages were up 6.2%, while across the 6 eurozone countries examined, the lowest posted was Spain at 3.5% with Germany the highest at 7.1% (partly due to a 20+% rise in the minimum wage last month).
- Another conclusion: wage growth is now above 3% in 60% of the occupational categories in the eurozone, and 87% in the UK, vs 40% in mid-2021 in both economies. Like consumer price inflation, wage growth is broadening out.