Real wage catch-up in the euro area

Colm Bates, Katalin Bodnár, Vasco Botelho and Flavie Rousseau

Economic Bulletin Boxes, 2025, vol. 5

Abstract: Real wages have been increasing in recent quarters, recovering after their decline during the period of high inflation in 2022. By the first quarter of 2025 – when deflated by price indices that reflect consumption patterns, such as the Harmonised Index of Consumer Prices and the private consumption deflator – real wages had almost returned to the levels recorded prior to the inflation surge. By contrast, when deflated by price indices that reflect the prices charged by domestic firms (such as the GDP deflator and sectoral value-added deflators), real wages have already surpassed the levels achieved before the high-inflation period. This reflects the fact that in the past few years, the rise in the cost of living has been higher than that in the prices charged domestically by euro area producers. JEL Classification: E24, E31, J30

Keywords: inflation; inflation perceptions; monetary policy; real wages (search for similar items in EconPapers)
Date: 2025-08
Note: 2881411
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.ecb.europa.eu//press/economic-bulletin ... 4~a71cdfe394.en.html (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbbox:2025:0005:4

Access Statistics for this article

More articles in Economic Bulletin Boxes from European Central Bank 60640 Frankfurt am Main, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Official Publications ().