Wages in the Eurozone Rise at the Fastest Pace Since 2002, Raising Concerns for ECB Plans

Since adopting the single currency in 2002, the Eurozone has witnessed an unprecedented surge in wages,
raising questions about the European Central Bank’s (ECB) ability to implement its plans to cut interest rates
amid expectations of renewed inflationary pressures.

Content

The Eurozone
Japan

The Eurozone

According to a report released on Wednesday by the European Central Bank,
negotiated wages rose by 5.4% year-on-year in the third quarter, compared to a 3.5% increase in the second quarter.
This acceleration in wage growth is among the highest levels seen in the region in years.

However, the ECB expects wage growth to decelerate sharply in 2025 and 2026,
which could help bring inflation back to its sustainable target of 2%.

In Germany, Europe’s largest economy, wages surged by 8.8% year-on-year in the three months ending in September,
marking the fastest growth rate since 1993.
This trend reflects increasing pressures that could affect price stability,
presenting additional challenges for the ECB in achieving its goals.

Japan

Japanese Imports See Slight Increase as Trade Deficit Widens in October

Japanese exports rebounded in October,
driven by rising demand from China for chip-making equipment
amid concerns about potential higher tariffs imposed by U.S. President-elect Donald Trump.

Data released by Japan’s Ministry of Finance on Wednesday showed that exports rose 3.1% year-on-year in October,
following a 1.7% decline in September. This exceeded market expectations of 2.2% growth.

The increase was supported by a 1.5% rise in exports to China due to strong demand for chip-making equipment.
However, exports to the United States—Japan’s largest trading partner—declined by 6.2%.

The data also showed a 0.4% rise in Japanese imports during October, slightly above the forecasted growth of 0.3%.
The trade deficit widened to ¥461.2 billion ($2.98 billion),
compared to ¥294.1 billion in September, driven by increased import volume.

It is worth noting that Japanese exports in September hit their lowest level in 43 months
but were bolstered in October by a 35.4% year-on-year increase in shipments to Middle Eastern countries.

Wages in the Eurozone Rise at the Fastest Pace Since 2002

Wages in the Eurozone Rise at the Fastest Pace Since 2002

Related Topics