Euro Area Labor Costs Growth Eases to 3.3% in Q4

Hourly labor costs in the Euro Area rose 3.3% year-over-year in Q4 2025, slowing slightly from an upwardly revised 3.4% in Q3. Wages and salaries grew 3.0%, down from 3.2%, while non-wage costs jumped 4.4%, up from 3.9%. By sector, labor costs climbed 3.5% in the non-business economy and 3.2% in the business economy, with industry (+2.5%), construction (+4.0%), and services (+3.4%) showing varied trends. Among major economies, growth slowed in Germany (3.2% vs. 4.3%) and the Netherlands (4.8% vs. 5.1%), held steady in France (1.7%), but accelerated in Spain (3.9% vs. 2.0%) and Italy (2.6% vs. 2.3%).

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.