Eurozone Labor Costs Growth Weakest Since 2021

Hourly labor costs in the Euro Area increased by 3% year-on-year in Q2 2026, following a 3.2% rise in the previous period, preliminary estimates showed. This marked the slowest pace of growth since Q4 2021. Wages and salaries rose by 3.0%, down from 3.3% in Q1, while non-wage costs advanced by 3%, up from 2.8%.

Hourly labor costs in the Euro Area increased by 3.2% year-on-year in Q1 2026, after a 3.3% rise in Q4 and compared with preliminary estimates of 3.3%. Wage growth accelerated (3.4% vs 3% in Q4 2025) but non-wage costs rose at a much slower pace (2.9% vs 4.3%). Among major economies, growth slowed in France (1.8% vs 2.1%) and the Netherlands (3.6% vs 4.8%), held steady in Germany (3.2%), but accelerated in Spain (5.1% vs 4%) and Italy (2.9% vs 2.5%).

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%).