Eurozone: Strong labour market, but still no signs of pick-up in wage growth - HSBC

Fabio Balboni, European Economist at HSBC, explains that the Eurozone’s labour market is getting strong, but there are still no signs of a pick-up in wage growth. 

Key Quotes

“The unemployment rate fell to 9.5% in February the lowest print since mid-2009. Job creation remains strong as firms continue to benefit from healthy demand (both domestic and external) and low wages.”

“But the dispersion of unemployment rates across the eurozone, remains high. Whilst Germany has all-time low unemployment, Italy and France are seeing little improvement. In Spain, the unemployment rate is still over 18%, though falling fast.”

“Wage growth has been stagnant despite rising inflation and a tightening labour market. It remains to be seen whether households will save less to maintain the strength of consumption growth, which has been a key driver of eurozone activity since 2014.”