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Euro-Area Wage Growth Signals ECB's Inflation Goal in Sight

Workers in the euro area are seeing the strongest pay gains in a decade, a rare piece of positive economic news for the European Central Bank as it heads toward scaling back extraordinary stimulus.

Compensation per employee in the euro area grew an annual 2.5 percent in the third quarter, according to Eurostat data published on the ECB’s website Friday. With the institution’s chief economist Peter Praet having recently flagged a timeframe of six to 12 months for wage growth to feed through to inflation, policy makers can expect to make progress on reaching their goal.