Eurozone; Wage growth looks to remain subdued in Q3 – ABN AMRO

Aline Schuiling, Senior Economist at ABN AMRO, notes that the wage growth in France came in weaker than expected in Q3 as wage growth in the private sector declined to 0.3% qoq in Q3, down from 0.4% in Q2.

Key Quotes

“Compared to a year before, wages were up by 1.5% in Q3, the same rate as in Q2. Moreover, the yoy growth rate of Q3 was only marginally higher than the 1.4% yoy that was recorded in the third quarter of 2017, illustrating that there is hardly any upward pressure.”

“All in all, we expect wage growth in France to remain subdued for a considerable time. The low level of wage growth in France means that underlying inflationary pressures remain weak as well.”

“We think developments in France are representative for the eurozone as a whole, where wage pressure will take a while to build significantly, with the exception of a handful of countries where the labour market is already tightening, such as Germany and the Netherlands.”