ECB Wage Tracker indicates easing wage pressure for 2026
The European Central Bank's Wage Tracker, updated with data until February 2026, continues to indicate easing wage pressure for negotiated wages in 2026. Forward-looking information suggests negotiated wage growth will stabilize around 2.6 percent by the end of 2026.
Smoothed wage growth sees downward revision
The European Central Bank's (ECB) Wage Tracker, which monitors collective wage agreements, indicates a 3.2 percent increase in negotiated wages for 2025 and 2.3 percent for 2026 when one-off payments are smoothed.
This represents a 0.1 percentage point downward revision for 2026 compared to the previous February 2026 data release.
The tracker with unsmoothed one-off payments shows wage growth of 3.0 percent for 2025 and 2.6 percent for 2026, also a 0.1 percentage point decrease for 2026.
The indicator excluding one-off payments projects a moderation from 3.9 percent in 2025 to 2.6 percent in 2026, again a 0.1 percentage point downward revision for 2026.
The coverage of the tracker gradually declines over the forward-looking horizon, reaching 39.7 percent of employees for 2026, as more collective agreements are yet to be concluded.
Seasonal dynamics of wage growth
The main indicator, smoothing one-off payments, shows quarterly averages rising from 1.9 percent in Q1 2026 to 2.6 percent by Q4. This increase is primarily due to statistical effects from distributing past one-off payments, not renewed wage pressure, with these effects expected to dissipate by year-end.
The unsmoothed Wage Tracker reflects a more stable outlook for 2026, with quarterly averages ranging from 2.9 percent in Q1 to 2.5 percent in Q4. The indicator without one-off payments is projected to remain around 2.6 percent for 2026, suggesting a more moderate dynamic for basic contractual remuneration than in prior years.
Average coverage for 2026 declines from 44.1 percent in Q1 to 36.3 percent in Q4.
Moderation, but with caveats
The latest Wage Tracker update provides welcome evidence of moderating wage growth, crucial for the ECB's price stability efforts.
However, declining 2026 coverage and the tracker's statistical nature mean these figures require cautious interpretation, as they are not a definitive forecast.
While supportive of disinflation, the data only represents one component of overall labor costs, with broader labor market dynamics remaining key.