The European Central Bank updated its wage tracker based on active collective bargaining agreements signed up to the first week of April 2025, with forward-looking information indicating that negotiated wage pressures are set to ease overall in 2025. In the headline tracker, which includes collectively agreed one-off payments smoothed over 12 months, negotiated wage growth is 4.8% in 2024 (average employee coverage 48.8% across participating countries) and 3.1% in 2025 (coverage 46.5%). With unsmoothed one-off payments, negotiated wage growth is 4.9% in 2024 and 2.8% in 2025, while the indicator excluding one-off payments shows 4.2% in 2024 and 3.8% in 2025. The steeply downward forward-looking profile in 2025 partly reflects the mechanical effect of large one-off payments paid in 2024 dropping out in 2025 and the frontloaded nature of some 2024 wage increases. The ECB cautioned that the tracker is subject to revisions and that its forward-looking component should not be interpreted as a forecast, as it only captures information in active agreements. For a broader assessment, it pointed to the March 2025 staff macroeconomic projections, which show compensation per employee growth of 4.6% in 2024 and 3.4% in 2025, with a 2025 quarterly profile declining from 3.8% in the first quarter to 2.8% in the fourth quarter.
European Central Bank 2025-04-23
European Central Bank updates wage tracker pointing to negotiated wage growth easing to 3.1% in 2025
The European Central Bank updated its wage tracker, indicating that negotiated wage pressures are expected to ease in 2025. The tracker shows negotiated wage growth of 4.8% in 2024 and 3.1% in 2025, with variations based on one-off payments. The ECB noted that the tracker is subject to revisions and should not be seen as a forecast, highlighting broader macroeconomic projections for a comprehensive view.