Seasonally adjusted employment:

3Q 2010: flat q/q, -0.2% y/y

MNI survey median: +0.1% q/q, -0.2% y/y
MNI survey range: -0.8% to +0.3% q/q

2Q 2010: +0.1% q/q (revised from flat)
1Q 2010: flat q/q (unrevised)
4Q 2009: -0.2% q/q (unrevised)

FRANKFURT (MNI) – Employment in the Eurozone stabilised in 3Q after
a recovery in 2Q, as further downsizing in agriculture, industry and
construction offset robust hiring in trade, transport, business and
other sectors, Eurostat reported on Wednesday.

Some 144.5 million men and women were employed in the Eurozone,
down 0.2% compared to 3Q 2009. Most analysts had expected a modest
quarterly change but were divided on the direction.

The strongest gains on the quarter were in financial services and
business activities (+0.3%); followed by other services (+0.2%); and
trade, transport and communication services (+0.1%).

Conversely, employment in construction continued to fall (-1.1%);
along with industry (-0.4%); and agriculture, hunting and fishing

Over the same period, 15.84 million persons on average were without
a job and actively searching for employment, Eurostat reported last
month. In October, the number of jobless rose to 15.947 million, the
highest level since the start of the series in 1995, lifting the
unemployment rate to a 12-year high of 10.1%.

A European Commission survey in November showed ongoing
improvements in hiring intentions in all major sectors except
construction, suggesting that employment could recover in the near term.
The same poll showed households’ jobless fears falling to their lowest
in over two years.

The Commission expects employment to recover by 0.6% in 2011 and in
2012 after an expected 0.7% slide this year.

“Looking ahead and taking into account the usual lag between output
and employment growth, the outlook is for a gradual improvement in
labour markets over the forecast horizon,” the Commission said in its
European Economic Forecast from last month.

“However, despite brightening since the spring, the outlook remains
for a rather jobless recovery and (potentially persistent) high
unemployment ahead at the aggregate level,” the report added.

Recent indicators highlight ongoing divergence at the country
level. Markit Economics’ purchasing managers index (PMI), noted that
private sector job growth was concentrated in Germany, France and Italy,
while job creation continued to slide in Spain and Ireland.

“The German patient goes from strength to strength, and is now
putting on weight in the form of rising employment,” said Markit chief
economist Chris Williamson. “But elsewhere in the hospital ward other
patients remain deeply dependent upon life support in the form of
ultra-low interest rates and central bank liquidity.”

“Furthermore, falling employment in the debt-laden periphery looks
set to ensure growth remains far weaker than in the core nations in
coming months, as domestic demand variations will persist,” Williamson

Today’s data also pointed to deviating quarterly trends between
various Eurozone states.

In Germany, a 0.3% rise in employment extended the number of
consecutive gains to three quarters. France also recorded its third rise
in a row, with employment growing 0.2% in 3Q. Other states with positive
rates included Slovakia at +0.4%, Austria and Belgium at +0.3%, and
Finland at +0.1%.

On the other side of the spectrum, employment levels in Italy fell
an additional 0.1% in 3Q. Spanish figures also showed further
deterioration of 0.7%, in line with the results in Greece.

— Frankfurt bureau: +49-69-720-142; email: —

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