European Central Bank Wage Tracker Shows Decline in Wage Growth
Latest data indicates a decrease in negotiated wage growth projections for 2025.
The European Central Bank (ECB) has updated its wage tracker with data reflecting collective bargaining agreements signed up to mid-May 2025. The updated tracker reveals that negotiated wage growth is projected to decline, aligning with trends discussed during the April 2025 Governing Council meeting.
According to the data, the headline negotiated wage growth was recorded at 4.7% for 2024, based on an average employee coverage of 48.8% across participating countries, while it is anticipated to fall to 3.1% in 2025, with an average coverage of 47.4%.
Further analysis provides a nuanced look at wage growth metrics.
The wage tracker that smooths out one-off payments indicates a growth level of 4.9% for 2024, whereas the figure for 2025 is expected to drop to 2.9%.
The tracker excluding one-off payments suggests a growth of 4.2% in 2024, with a more moderate increase of 3.8% anticipated for 2025. These figures underscore a downward trend primarily influenced by the expiration of substantial one-off payments made in 2024 and the front-loaded nature of wage increases observed in some sectors last year.
In terms of macroeconomic assessments, the latest Eurosystem staff projections forecast a yearly growth rate of compensation per employee in the euro area to be 3.2% for 2025. This projection illustrates a quarterly breakdown of 3.5% in the first quarter, followed by 3.4% in the second quarter, 3.1% in the third, and a decline to 2.8% in the fourth quarter.
The ECB's analysis features four distinct indicators that reflect wage trends across seven participating euro area countries.
The tracker mechanisms aim to provide a more accurate representation of wage discrimination across various labor markets by analyzing the coverage among employees, which ranges significantly across the individual countries.
As the data suggests, the percentage of employees included in the wage tracker has fluctuated slightly, revealing that Germany, France, and Spain show relatively higher participation rates relative to other nations in the euro area.
For the 2013-2023 period, the coverage averaged 49.1%, highlighting the ongoing variances in labor agreements and wage negotiations across participating countries.
The collected data may be subject to revisions as new agreements are negotiated and current contracts evolve.
The ECB emphasizes that the forward-looking nature of the tracker relies heavily on the current database of active collective bargaining agreements, making it essential to interpret wage signals with caution given potential future adjustments.
According to the data, the headline negotiated wage growth was recorded at 4.7% for 2024, based on an average employee coverage of 48.8% across participating countries, while it is anticipated to fall to 3.1% in 2025, with an average coverage of 47.4%.
Further analysis provides a nuanced look at wage growth metrics.
The wage tracker that smooths out one-off payments indicates a growth level of 4.9% for 2024, whereas the figure for 2025 is expected to drop to 2.9%.
The tracker excluding one-off payments suggests a growth of 4.2% in 2024, with a more moderate increase of 3.8% anticipated for 2025. These figures underscore a downward trend primarily influenced by the expiration of substantial one-off payments made in 2024 and the front-loaded nature of wage increases observed in some sectors last year.
In terms of macroeconomic assessments, the latest Eurosystem staff projections forecast a yearly growth rate of compensation per employee in the euro area to be 3.2% for 2025. This projection illustrates a quarterly breakdown of 3.5% in the first quarter, followed by 3.4% in the second quarter, 3.1% in the third, and a decline to 2.8% in the fourth quarter.
The ECB's analysis features four distinct indicators that reflect wage trends across seven participating euro area countries.
The tracker mechanisms aim to provide a more accurate representation of wage discrimination across various labor markets by analyzing the coverage among employees, which ranges significantly across the individual countries.
As the data suggests, the percentage of employees included in the wage tracker has fluctuated slightly, revealing that Germany, France, and Spain show relatively higher participation rates relative to other nations in the euro area.
For the 2013-2023 period, the coverage averaged 49.1%, highlighting the ongoing variances in labor agreements and wage negotiations across participating countries.
The collected data may be subject to revisions as new agreements are negotiated and current contracts evolve.
The ECB emphasizes that the forward-looking nature of the tracker relies heavily on the current database of active collective bargaining agreements, making it essential to interpret wage signals with caution given potential future adjustments.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.