FRANKFURT, September 17 — The European Central Bank’s wage tracker puts negotiated pay pressures at 2.7% in the first quarter of 2027 and 2.8% in the second quarter, according to data published by the bank on September 16. The bottom line for rate-setters: wage growth in the euro area is cooling, not reheating. The tracker that smooths one-off payments — the ECB’s headline measure — indicates negotiated wage pressures of 2.2% for 2026, based on coverage of 46.9% of employees in the nine participating euro area countries.
That 2026 reading sits below the quarterly figures for next year, a gap the ECB attributes to timing rather than a change in bargaining behaviour. One-off payments made in the second half of 2024 and not repeated the following year dragged the tracker down mechanically in the first half of 2026.
Those effects dissipate fully in the second half of the year.
One-off payments fade out
The unsmoothed tracker, which the ECB says better describes yearly dynamics, moderated from 3.0% in 2025 to 2.6% in 2026. Strip out one-off payments entirely and the tracker still stands at 2.6% on average in 2026 — a sign that lump-sum payments played only a limited role in recent collective bargaining agreements. At the quarterly frequency, all indicators converge: 2.7% in the first quarter of 2027 and 2.8% in the second.
The headline tracker was broadly unchanged for the fourth quarter of 2026 and the first quarter of 2027, even though employee coverage rose significantly. Coverage is the figure that matters for anyone reading the forward-looking numbers.
The 46.9% of employees covered for 2026 falls to 32.5% in the first quarter of 2027 and 25.1% in the second, because fewer wage agreements have been signed that far out. Coverage will build as new deals are struck. The ECB notes that coverage for 2026 and the first half of 2027 is broadly similar to the same point last year, as recorded in its September 2025 release.
Revisions and caveats
Compared with the July 2026 data release, the smoothed tracker was revised downwards slightly for 2026. The ECB is explicit about the limits of the exercise. The wage tracker may be revised, and its forward-looking component should not be read as a forecast — it captures only information currently available for active collective bargaining agreements.
The tracker also does not follow the indicator of negotiated wage growth precisely, and the bank says deviations are to be expected over time. For a fuller picture of euro area wage developments, the ECB points to its September 2026 staff macroeconomic projections, which put yearly growth in compensation per employee at 3.3% in 2026.
The bank publishes four wage tracker indicators for the aggregate of the nine participating countries on the ECB Data Portal. The forward-looking horizon has been extended to the end of June 2027. As new agreements are signed and coverage of contracts reaching 2027 increases, the horizon extends further — to the third quarter of 2027 in the November 2026 data release, and to the full year of 2027 in the December 2026 release.
Investors will note that those two releases will carry far more weight than today’s, because they will rest on a wider slice of the euro area’s pay deals.
