Bert Colijn, Senior Economist at ING, notes that Eurozone’s wage growth increased modestly according to the Labour Cost Index, up from 1.6% in 4Q 2017 to 1.8% YoY in 1Q 2018.
Key Quotes
“As the collective bargaining agreement for the German steel and metal industry has boosted negotiated wages from 1.6% to 1.9% YoY growth in the eurozone as a whole, today’s LCI wage growth is probably mostly related to that.”
“There are good arguments for improving wage growth in the second half of the year though. The labour market has been improving significantly over the past years and labour shortages have reemerged.”
“Wage growth is therefore likely to continue to improve at a modest pace, confirming our view of a slow recovery in core inflation for the second half of 2018.”
“Seasonally-adjusted trade data showed a mixed bag with imports growing faster than exports in April, 1.4% and 0.4% MoM, respectively.”
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