Getting a handle on euro-zone wage data

Euro-zone wage data are published only quarterly, and with a long lag, and have been distorted by pandemic-related effects. So it will be another six months before we get a clearer idea of the underlying trend in earnings. For now, though, measures of spare capacity suggest that wage growth is likely to remain around 2.0-2.5%, which has in the past not been enough to push consumer price inflation to 2%.
Jessica Hinds Europe Economist
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European Economics Weekly

ECB’s line on inflation contrasts with the Fed’s

In contrast to those at the US Fed, ECB policymakers are not ready to retire their argument that the current bout of high inflation is temporary. This reflects the significant difference in inflationary pressures between the two economies. Next week, we will get the detailed breakdown of November’s German inflation data, which will shed more light on the stronger-than-expected outturn. Meanwhile, with less than two weeks to go until December’s ECB meeting, the Governing Council appears to have reached a consensus on some aspects of its asset purchase programmes. But comments from Christine Lagarde today suggest that it will avoid making any long-term commitments.

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European Data Response

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More from Jessica Hinds

European Economics Weekly

Business surveys point to continued recovery

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27 August 2021

European Data Response

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17 August 2021

European Economics Update

Weak wage growth trumps strong price pressures

The latest data show pipeline price pressures continuing to mount in the euro-zone, pointing on the face of it to much higher consumer price inflation. But while there is arguably scope for a small rise in core goods inflation, subdued wage growth will keep services, and therefore underlying, inflation low.

9 August 2021
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