Eurozone Labor Cost Growth Moderates in Q3

Hourly labor costs in the Euro Area increased by 3.3% year-on-year in the third quarter of 2025, easing from 3.6% in the previous quarter and below the preliminary estimate of 3.5%. Wage and salary growth slowed to 3.0% from 3.7% in Q2 2025, while non-wage costs, including social contributions and benefits, climbed 4.0% compared with 3.4%. By sector, the business economy saw a 3.3% rise in hourly labor costs, led by construction (+4.3%), industry (+3.3%), and services (+3.2%), whereas the non-business economy posted a more moderate increase of 3.1%. Among the Eurozone’s largest economies, labor cost growth moderated in Germany (4.0% vs. 4.3% in Q2), Italy (2.8% vs. 3.8%), Spain (2.1% vs. 3.7%), and the Netherlands (3.8% vs. 6.5%), while France saw a slight acceleration (1.7% vs. 1.6%).

Hourly labor costs in the Euro Area rose by 3.5% year-on-year in Q3 2025, following a 3.6% increase in the prior period, according to preliminary estimates. The wage component increased by 3.4%, down from 3.7% previously, while the non-wage component rose by 3.5%, after a 3.6% advance in Q2.

Hourly labor costs in the Euro Area increased by 3.6% year-on-year in the second quarter of 2025, a touch below the preliminary estimate of 3.7% but up from 3.4% in the previous quarter. Growth was driven by a 3.7% rise in wages and salaries, compared with 3.5% in the first quarter, while non-wage costs such as social contributions and benefits climbed 3.4%, up from 3.2% previously. Across sectors, the business economy recorded a 4.0% rise in hourly labor costs, led by construction (+4.7%), services (+4.3%), and industry (+3.3%). In contrast, the non-business economy saw a more moderate increase of 2.7%. Among the Eurozone’s largest economies, labor cost growth strengthened in Germany (3.5% vs. 2.5% in Q1) and the Netherlands (6.0% vs. 5.9%). In contrast, it remained stable in Spain (3.7%) but slowed in Italy (3.8% vs. 4.4%) and France (1.4% vs. 2.0%).