Euro area wage growth stable at 2.6 percent for 2026
The European Central Bank's wage tracker indicates stable negotiated wage growth of around 2.6 percent by end-2026. This outlook is based on agreements signed up to end-May 2026.
Unpacking the wage indicators
The ECB's wage tracker, covering active collective bargaining agreements, provides several perspectives on negotiated wage growth.
The headline tracker, which smooths one-off payments, shows growth of 3.2 percent in 2025 and 2.3 percent in 2026.
For yearly dynamics, the tracker with unsmoothed one-off payments indicates 3.0 percent in 2025 and 2.6 percent in 2026.
When excluding one-off payments entirely, negotiated wage growth eases from 3.8 percent in 2025 to 2.6 percent in 2026.
The headline tracker is better suited for quarterly dynamics, while the unsmoothed version provides a clearer picture of yearly trends.
Employee coverage for 2026 ranges from 46.4 percent in Q1 to 40.4 percent in Q4 across participating countries.
2026: A clearer wage picture
For 2026, the headline ECB wage tracker shows an increase over the year, averaging 1.8 percent in the first quarter, 2.1 percent in the second, and 2.6 percent in the third and fourth quarters.
This upward trend reflects the diminishing mechanical downward effect of large one-off payments made in 2024.
The tracker with unsmoothed one-off payments presents a stable outlook for 2026, averaging 2.9 percent in Q1, 2.6 percent in Q2, and 2.5 percent in Q3/Q4. The indicator excluding one-off payments is expected to remain around 2.6 percent throughout 2026, signaling moderate base wage dynamics.
The forward-looking horizon of the tracker will extend to Q1 2027 with the July 2026 data release.
Data clarity, policy caution
This latest wage tracker offers crucial granular insights into euro area wage dynamics, a key input for the ECB's monetary policy.
The indicated stability in negotiated wage growth for 2026 suggests moderating underlying inflationary pressures from the labor market.
Yet, the explicit caveats regarding potential revisions underscore the ongoing need for a cautious, data-dependent approach by policymakers.