UPDATE 1-Euro zone Q4 employment falls, points to weak growth

* Employment falls 0.2 pct q/q, 2.0 pct y/y

* Industrial sector sheds most jobs, public sector grows

(Updates with analysts’ comments)

By Marcin Grajewski

BRUSSELS, March 15 (BestGrowthStock) – The euro zone lost 347,000
jobs in the last quarter of 2009, data showed on Monday, as the
16-country area’s economic recovery remained beset by fragility.

The number of employed fell 0.2 percent in the final three
months of the year against the previous quarter to 144.3
million, pulled down by job losses in the industrial sector,
European Union statistics office Eurostat said. [ID:nBRQ009767]

Employment during the fourth quarter fell 2.0 percent
year-on-year.

The data showed that although the euro zone is recovering
from the worst economic crisis since World War Two, it continues
to shed jobs, hitting people’s spending power and undermining
future growth.

“The 0.2 percent quarterly fall was the sixth in a row,
confirming that the modest economic recovery has yet to
encourage hiring,” said Jennifer McKeown, analyst at Capital
Economics.

The euro zone’s gross domestic product grew by 0.1 percent
in last year’s final three months against the third quarter and
contracted by 2.1 percent from a year earlier.

Eurostat said employment fell 1.1 percent quarter-on-quarter
in manufacturing, 0.4 percent in construction, 0.5 percent in
trade, transport and communications and 0.1 percent in the
financial sector.

“We believe that growth in most countries is unlikely to be
strong enough to generate net jobs for some time to come and
businesses will consequently be keen to keep their workforces as
tight as possible,” said Howard Archer, chief European economist
at IHS Global Insight.

Employment in the public sector, health care and
administration increased 0.2 percent.

The steepest drops were registered in Greece and Spain, both
at 0.8 percent. The two countries have been hit especially hard
by the crisis, with Greece undergoing a severe austerity
programme after years of overspending.

The euro zone’s unemployment stayed flat in January from the
previous month at 9.9 percent. Joblessness last reached such a
level in October 1998.

The data strengthened expectations that the European Central
Bank would keep its main interest rate at a historic low of 1.0
percent for many months.

“Ongoing soft labour markets in 2010 are likely to hold down
wage growth and limit the upside for consumer spending.
Consequently, there remains a compelling case for the ECB to
keep interest rates down at 1.00 percent for many months to
come,” IHS Global Insight’s Archer said.

Stock Market Investing
(Editing by Dale Hudson)

UPDATE 1-Euro zone Q4 employment falls, points to weak growth