According to Jinshi, European Central Bank data showed that wages in the euro area rose by 4.5% by the end of 2023, easing concerns that rising wages could push inflation above target. Although wage growth in the fourth quarter was still high, it was lower than the highest level in the euro area.
ECB officials have made labor costs a key factor in deciding when to cut rates, with the indicator more anticipated than ever. ECB President Christine Lagarde last week singled out wages as "an increasingly important driver of inflation dynamics in the coming quarters" while warning against "hasty decisions" on easing policy without ensuring price gains return to the 2% target.