Eurozone GDP growth downgraded in first quarter but employment holding up
Unemployment has been holding at record lows all year
[FRANKFURT] The eurozone economy grew slower in the first quarter than initially estimated but employment held up well, indicating that the bloc keeps creating jobs despite years of anaemic expansion, data from Eurostat showed on Thursday (May 15).
Gross domestic product in the first three months grew by 0.3 per cent, below an initial estimate for 0.4 per cent, but that was still an improvement on previous quarter as industry finally expanded and employment growth also picked up.
Compared with a year earlier, the bloc’s economy expanded by 1.2 per cent, the same as three months earlier, broadly in line with what the ECB considers the bloc’s potential.
While the eurozone has consistently underperformed the US in recent years, the 0.3 per cent quarterly growth rate is far better than the 0.3 per cent contraction reported in the US, which in great part was a reflection of surging imports ahead of tariffs.
Eurozone employment, meanwhile, expanded by 0.3 per cent compared with the previous quarter, the highest figure in four quarters, likely easing fears that weak growth could finally prompt firms to start shedding workers.
Unemployment has been holding at record lows all year, confounding some expectations that, with no prospect for a meaningful rebound in growth, firms could reassess their plans to keep hanging on to workers.
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Among the bloc’s biggest economies, Germany grew by 0.2 per cent, France by 0.1 per cent, Italy by 0.3 per cent and Spain by 0.6 per cent compared to the previous quarter. REUTERS
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