According to the paper the new trackers are based on collective wage agreement data from seven countries, including the 5 largest eurozone economies: Germany, France, Italy, Spain, the Netherlands, Austria and Greece. Trackers for three more countries – Belgium, Finland and Portugal – are being developed.

“The paper demonstrates how agreement-level data can be used to study drivers of aggregate negotiated wage growth, as well as monitor the breadth of wage increases and account for time-varying factors such as one-off payments when assessing wage pressures,” the ECB said in the paper’s abstract.

In the euro area and the five largest economies, more than 75% of all employees are covered by collective agreements. In some countries like France, Italy and Belgium the figure is close to 100%. The ECB has had an indicator of negotiated wage growth for nine countries since 2001, but the data it’s based on is non-harmonised across those countries. The new forward-looking trackers aim to harmonise this data and improve the accuracy of the ECB’s negotiated wage growth indicator and can be used to cross-check wage growth forecasts and provide signals for current and future wage pressures.

Frederik Ducrozet, head of macroeconomic research at Pictet, commented on X that the ECB’s leading indicators including the “new tracker” point to “some cooling of wage pressure in recent months.”