Low unemployment, plenty of labour: what does it imply for wage pressures?
9 March 2026By Oscar Arce and David SondermannEuro area unemployment is near record lows and set to fall further. Yet wage growth is projected to moderate. Paradox? Not if you look beyond unemployment – immigration, participation, job switching and firms’ hiring intentions are all part of the story.Slack in the labour market is a key input into monetary policy assessments of wage growth and inflation.[1] It is about the balance…

