German negotiated wages rise at 3.2 percent 2014

German negotiated wages rise at 3.2 percent 2014

FABIAN BIMMER

The Federal Statistics Office revised up its original estimate by 0.1 percentage points. Wages for the roughly 19 million workers covered by negotiated wage deals rose more than three times as steeply as inflation, which was at 0.9 percent on average last year.

The increase was far stronger than in 2013, when workers under collective wage agreements had a 2.4 percent pay hike and in 2012, when their paychecks increased by 2.7 percent.

Rising wages, a stable labor market and lower oil prices are helping to boost household spending in Europe's largest economy.

Private consumption was the main driver of growth in the fourth quarter of 2014 and with consumer morale at its highest in more than 13 years, there is no sign of that abating, especially as Germany's biggest trade union won an inflation-busting wage deal earlier this week.

Engineering union IG Metall secured a 3.4 percent wage increase for 15 months from April plus a one-off payment of 150 euros in a deal that is likely to benefit 3.7 million workers. The head of IG Metall union's southwest region said that was the biggest real wage increase for years.

(Reporting by Michelle Martin and Rene Wagner Editing by Jeremy Gaunt)

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