Eurozone Wage Growth Reaches 5.42% in Q3

Negotiated wage growth in the Eurozone accelerated to 5.42% in the third quarter, up from 3.54% in the previous quarter, marking the fastest rise since early 1993. This increase is attributed to workers seeking compensation for inflation-related losses, complicating the European Central Bank's (ECB) plans for interest rate cuts. While the data suggests a robust labor market, with record low unemployment and ongoing hiring, economists predict a cooling trend in wage growth next year as inflation pressures ease. Recent wage agreements, such as a 5.5% increase for 4 million workers in Germany, may temper further wage demands. The ECB remains cautious, balancing the need for moderation to avoid fueling inflation while acknowledging the necessity of real wage recovery. Despite the wage growth, there is little indication of a significant resurgence in consumer prices, leading to hopes that wage pressures will diminish going forward.