FX.co ★ Eurozone Labor Costs Rise 3.6% in Q2

In the second quarter of 2025, hourly labor costs in the Euro Area experienced a 3.6% increase compared to the same period the previous year. This rise was marginally lower than the preliminary projection of 3.7% but marked an improvement from the 3.4% growth recorded in the first quarter. The increase was primarily fueled by a 3.7% growth in wages and salaries, up from 3.5% earlier in the year. Additionally, non-wage expenses, including social contributions and benefits, rose by 3.4%, compared to a previous increase of 3.2%. Within different sectors, the business economy experienced a 4.0% hike in hourly labor costs, with construction leading at 4.7%, followed by services at 4.3%, and industry at 3.3%. In contrast, the non-business economy saw a more modest rise of 2.7%. Among the major economies in the Eurozone, Germany and the Netherlands observed escalated labor cost growth, with Germany at 3.5%, up from 2.5% in the first quarter, and the Netherlands at 6.0%, slightly up from 5.9%. Meanwhile, labor cost growth remained stable in Spain at 3.7%, but decelerated in Italy to 3.8% from 4.4%, and in France to 1.4% from 2.0%.