European Labour Cost Index

About this data

Seasonally and working-day adjusted quarterly hourly labour cost index (2020=100) for the Euro area and the EU. The table covers total labour costs for the entire non-farm economy, disaggregated into wages and salaries and non-wage components (social security contributions, benefits, and labour taxes), alongside industry and services breakdowns. This is the ECB's most closely watched indicator for assessing wage-driven inflation pressures—persistent services inflation almost invariably coincides with rapid labour cost growth. The latter part of the table (keyed `lcix-`) breaks down data across 26 NACE Rev. 2 economic activities. This section is scrutinized by the ECB to determine whether inflation is entrenched: labour cost increases in the SERVICES sector (trade, accommodation and food service, human health and social work, public administration) pass through almost directly into service prices, whereas in manufacturing, productivity gains help absorb a portion of the rise. The accommodation and food service sector experienced the earliest and sharpest post-pandemic surge in labour costs driven by labour shortages. Note that the metric measures costs per HOUR rather than per employee: when average working hours decline while the total wage bill remains unchanged, the index still rises. Because labour cost surveys are conducted only down to the division level, the table stops there and does not extend to finer industry classifications such as those for IIP and PPI. Source: Eurostat.