Hourly labor costs in the Euro Area increased by 3.6% year-on-year in the second quarter of 2025, a touch below the preliminary estimate of 3.7% but up from 3.4% in the previous quarter. Growth was driven by a 3.7% rise in wages and salaries, compared with 3.5% in the first quarter, while non-wage costs such as social contributions and benefits climbed 3.4%, up from 3.2% previously. Across sectors, the business economy recorded a 4.0% rise in hourly labor costs, led by construction (+4.7%), services (+4.3%), and industry (+3.3%). In contrast, the non-business economy saw a more moderate increase of 2.7%. Among the Eurozone’s largest economies, labor cost growth strengthened in Germany (3.5% vs. 2.5% in Q1) and the Netherlands (6.0% vs. 5.9%). In contrast, it remained stable in Spain (3.7%) but slowed in Italy (3.8% vs. 4.4%) and France (1.4% vs. 2.0%).
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