FRANKFURT: Wage growth in the euro zone edged up in June as salaries continued to catch up with prices after two years of high inflation, jobs website Indeed said on Wednesday. The latest Indeed Wage Tracker data, often mentioned by the European Central Bank‘s chief economist Philip Lane, was broadly in line with the ECB‘s own projections and should not derail expectations for one or two more interest rate cuts this year.

Salaries for jobs advertised on the Indeed website were up 3.7% year-on-year in June, accelerating from 3.5% in the previous three months but still well below a post-pandemic peak of 5.4%.

“Wage growth has been stable or falling in France, Germany and Ireland, and is already at or close to pre-pandemic levels in those countries,” Indeed said. “But in Italy, the Netherlands and Spain, wage growth has been picking up and remains high.”

The ECB cut rates in early June and said more easing was likely coming, but the timeline would depend on data about wages, profits and underlying inflation.

Overall compensation per employee (CPE) in the euro zone, which also includes existing jobs, grew by 5.0% in the three months to June, boosted by negotiated contracts that often contain one-off payments, according to Indeed’s projections.

The ECB expects CPE to have grown by 5.1% in the second quarter of the year before easing to 4.7% in Q3 and 4.5% in Q4.

“Our Q2 projections for CPE growth – based on new Indeed Wage Tracker data to June and the ECB’s negotiated wage tracker – support this narrative,” Indeed said.

It added that a “continuing decline in job posting volumes” suggested demand pressures in the European labour market were gradually easing. (Reporting by Francesco Canepa; Editing by David Holmes)