The European inflation debate needs better wage data

 

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While the US provides monthly updates on the development of wages, eurozone wage data is published quarterly, creating delays of up to six months. This negatively affects how inflation is discussed in Europe and could lead to bad economic policy.

Year-on-year inflation in the euro area reached 8.6% in June 2022. Although the price rise is still clearly driven by energy prices, monetary and fiscal hawks are fast to marshal the European Central Bank (ECB) towards rate hikes or to warn against public expenditure as it might lead to an overheated, inflationary economy. (...)