Inflation rose in September to a historic high and wages greatly slowed

Inflation rose in September to a historic high and wages greatly slowed

The rise in inflation is mainly due to the development of energy prices. Energy (electricity, gas and district heating) prices rose the most in September, reports Central Statistics Office (CBS) This morning.

Energy was 200 percent more expensive in September than it was in the same month last year. In August, the year-over-year increase was 151 percent. The inflation rate compared to the same month in 2021 at that time was 12 percent.

Even without energy prices

But even if you ignore the sharp rise in energy and fuel prices, inflation picked up in September. This is evidenced by the figure calculated by Statistics Netherlands, which does not include developments in gas, electricity, heating and motor fuel prices.

In September, prices of consumer goods and services excluding energy and motor fuel increased by 6.5 percent compared to the same month last year. In August, the annual price increase was 6.0 percent.

European character

Today’s figure differs from the inflation rate of more than 17 percent according to the European method of calculation, which was released last week. In the section below we explain the source of this difference and why there are some caveats in today’s number.

Insufficient wage increase

As life becomes more and more precious month after month, Wages are still lagging. On average, wages rose by 3.4 percent in collective labor agreements concluded in the months of July, August and September.

Despite this sharp increase, the evolution of wages in the collective labor agreement is much less than that of consumer prices. When calculated over the entire third quarter, it was 12.3 percent higher than a year earlier.

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In the available figures for collectively negotiated wages and the consumer price index, going back to 1973, never before has the development of collectively negotiated wages lagged so far behind inflation.

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