Employment: wages rose at a slower rate than inflation in the second quarter of 2026
After 10 quarters in which year-on-year wage growth had outpaced inflation, the second quarter saw a reversal of this trend, with wages rising by 2.5 per cent compared with a 3 per cent increase in the Consumer Price Index
Key points
After ten consecutive quarters in which the year-on-year growth in contractual hourly wages had outpaced inflation, the second quarter of 2026 saw a reversal of this trend: they rose by 2.5% across the economy as a whole, whilst the Harmonised Index of Consumer Prices (HICP) rose by 3%. Istat reports a slight slowdown compared with the first quarter of 2026, when contractual wages had risen by 2.6%.
The average year-on-year growth in collectively agreed wages in the private sector is 2.3%
In particular, between April and June, the average year-on-year growth in contractual wages for the private sector stood at 2.3 per cent, a slight slowdown compared with the 2.4 per cent recorded in the previous quarter. More specifically, in the second quarter, contractual wages rose by 1.2% in agriculture, by 2.4% in industry and by 2.3% in the private services sector.
In the public sector, as a result of the pay rises for the 2022–2024 three-year period, the pay trend was slightly more favourable: +2.7 per cent, though this too was below the +3.3 per cent recorded in the first quarter.
Based on the contracts in force at the end of June, the index of contractual hourly wages for the economy as a whole rose by 2.3% in the July–December 2026 half-year, and Istat’s projections indicate an expected increase of 2.4% on average for 2026.
There are 25 contracts awaiting renewal, covering around 3.9 million employees
At the end of June, there were 50 collective agreements in force governing the pay of around 9.1 million employees, accounting for 67.3 per cent of the total wage bill; this figure rises to 87.5 per cent in the private sector – varying by economic sector: 100 per cent in agriculture, 95.7 per cent in industry and 79.7 per cent in private services – and stands at zero in the public administration, where all collective agreements have expired.
