Data on eurozone GDP and employment in the third quarter shows that the single currency economy at the end of September was only 0.5% below the pre-pandemic level recorded for a product and allows for predictions that employment will maintain a growth trajectory in the last three months of the year, according to an analysis. Pantheon Macroeconomics.
The quarter-on-quarter growth of 2.2% in the third quarter was slightly higher than the 2.1% recorded in the prior period and in line with Eurostat’s initial estimate, it was ostentatious before the arrival of Covid-19.
This performance exceeds the recovery recorded in the United Kingdom, for example, where GDP in the third quarter remained below the 2.1% recorded in the last period of 2019, but it does not compete with the scenario in the United States, where it has already exceeded this indicator. The values were checked before the epidemic.
Despite the lack of data disaggregated by sector, an analysis of the national accounts of the eurozone member states allows us to estimate that the increase in the third quarter was driven, above all, by an increase in private consumption and services sector, details the Pantheon.
At the same time, the results of several surveys of companies and consumers indicate a clear slowdown in growth in the fourth quarter, for which think tank 0.8% advance projects. If verified, it will lead to a growth of the single currency economy by 5.0% at the end of 2021.
In terms of employment, this grew 2.0% on an annual basis, which is above expectations at 1.6% and represents an acceleration compared to the previous reading, which remained at 1.9%. In a series, employment growth was 0.9%.
Pantheon estimates that the unemployment rate will continue to decline to 7.0% at the end of the year, a scenario consistent with various surveys of confidence and economic sentiment and with the continued decline of this indicator in the major economies of the single currency. However, employment growth is expected to slow down, after the strong impetus given by the lifting of epidemic restrictions in most member states.
Reimposition of these restrictions is also a possibility that remains a strong downside risk to the US establishment’s outlook, along with disruptions in supply chains and higher energy prices.
