Euro zone employment stable in Q3

By Marcin Grajewski

BRUSSELS (BestGrowthStock) – Euro zone employment stabilized in the third quarter of 2010 after a modest increase in the previous three months, data showed on Wednesday, as economic growth slowed and many countries prepared for fiscal austerity.

The number of employed held stable in the July-September period at 144.5 million people as construction, industry and agriculture lost jobs while the financial services, public administration, health and transport increased headcounts.

Employment during the third quarter fell 0.2 percent year-on-year. Employment is a lagging indicator, so it reacted with a delay to the euro zone’s recovery from the worst economic crisis in decades.

Euro zone growth slowed to 0.4 percent quarter-on-quarter in the July-September period, from 1.0 percent in the previous three months.

“The fact that euro zone employment was only stable in the third quarter indicates that companies are still reluctant to take on workers and may well be trying to get as much as they can out of their existing workers,” said Howard Archer, chief European analyst at IHS Global Insight.

“We remain doubtful that euro zone labor markets will see major improvement for some time to come so unemployment seems likely to remain high overall.”

Eurostat said euro zone employment fell 1.1 percent quarter-on-quarter in construction, 0.3 percent in manufacturing and 0.2 percent in agriculture. It grew 0.3 percent in financial services and business activities and 0.2 percent in public administration, health and education.

Country figures confirmed wide disparities across the currency area, which analysts say have resulted in the current sovereign debt crisis.

Germany, the euro zone’s biggest economy, increased its employment by 0.3 percent in the third quarter while France, the second biggest, by 0.2 percent.

Crisis-hit Greece and Spain saw their employment rates fall by 0.7 percent over the period.

Euro zone unemployment inched up in October to 10.1 percent, the highest level since July 1998, previous Eurostat figures showed.

(Editing by Rex Merrifield)

Euro zone employment stable in Q3