The slowdown in labor costs in the eurozone
In the third quarter of 2024, labor cost growth in the euro area slowed significantly, registering an increase of 4.6% compared to the same period of the previous year.
This figure, announced by Eurostat, marks a decrease compared to 5.2% in the second quarter, which had been revised downwards from a preliminary estimate of 4.7%.
Falling wage dynamics
At the same time, wage dynamics also followed a similar trend, with the trend rate of wage growth standing at 4.4%, down from 4.9% in the previous quarter. This slowdown could reflect a number of macroeconomic factors affecting the labor market in the Eurozone, such as economic uncertainty and restrictive monetary policies
.
Implications for the labor market
The decline in labor cost and wage growth could have significant implications for the European labor market. Companies may be more reluctant to hire new workers or increase wages, which could lead to stagnation in employment. In addition, this scenario could influence investment decisions, with companies that could take a more cautious approach in an environment of uncertain economic growth
.
Economic situation in Germany and the United Kingdom
In Germany, the manufacturing sector continues to be in recession, while the service sector shows signs of recovery. The December PMI data show a decline in the manufacturing index and an increase in the services index above 50, a sign of economic expansion. Meanwhile, the British government has approved the acquisition of Royal Mail by Ep Group, ensuring the maintenance of the headquarters in the United Kingdom and protections for workers, an important step in safeguarding jobs and
essential services.
Future prospects and financial markets
The European stock exchanges showed a cautious start, with the Ftse Mib substantially unchanged at Piazza Affari. Investors are waiting for the Fed’s decisions, while retail sales in China slowed down in November, although industrial production showed a slight improvement. These developments suggest that, while there are signs of recovery in some sectors, the road to sustainable economic growth remains complex and full of challenges.