Seasonally adjusted employment:
2Q 2010: flat q/q, -0.6% y/y
MNI survey median: +0.1% q/q, -0.7% y/y
MNI survey range: -0.1% to +0.2% q/q
1Q 2010: unchanged (unrevised)
4Q 2009: -0.2% q/q (unrevised)
3Q 2009: -0.5% q/q (unrevised)
—
FRANKFURT (MNI) – Eurozone employment levels remained stable in 2Q
as hiring in the financial and business sectors offset further
downsizing in industry, construction and trade, Eurostat said Wednesday.
Most analysts had expected a modest increase in jobs.
Some 144.3 million persons were employed in 2Q, reflecting a loss
of 14,000 compared 1Q’s level. Compared to the same period last year,
seasonally adjusted employment was down 0.6%.
Quarterly job losses continued in the bulk of sectors, led by
agriculture, which had 0.9% fewer jobs versus the previous period, and
industry, where 0.5% fewer jobs were noted.
Gains were registered in financial services and business activities
(+0.6%) and other services (+0.2%).
In July, the number of unemployed dropped by 8,000 after rising by
3,000 in June and 53,000 in May, Eurostat reported previously. Still, at
10% of the workforce, unemployment remained at the highest level since
the euro was introduced a decade ago.
Leading indicators signal modest growth in jobs ahead. The
Eurozone’s composite PMI employment index rose to 51.7 in August from
51.4 in July, extending a recent trend to four months. The sub-index for
manufacturing employment stood at 51.1 while the sub-index for services
employment stood at 52.0.
The European Commission’s survey last month showed hiring
expectations stabilizing in the manufacturing and services sectors,
while employment expectations over the next three month deteriorated in
retailing, construction and financial services. Except for
manufacturing, the employment expectations in all sectors remain below
their long-term average.
Nevertheless, in its September interim forecasts, the Commission
said that “survey indicators of firms’ employment expectations point to
moderate job creation going forward, as does the PMI employment index
which crossed the 50-mark in May.”
“Taken together with the strong upward revision to economic growth
in 2010, it seems that the labour market may hold up somewhat better
this year than expected at the time of the Spring forecast,” the
Commission said. In spring the Commission had forecast unemployment to
rise to 9.8% in 2010 before declining to 9.7% in 2011.
Still, the Commission warned that overall conditions are set to
remain weak, “reflecting, inter alia, the partial unwinding of support
measures and ongoing structural adjustment across sectors and firms.”
It also cautioned that there would be notable divergence among
Eurozone countries in labour market performance ahead. This divergence,
starting in August 2007, has by now wiped out any convergence seen over
the decade preceding it. Disconcertingly, unemployment levels are above
the Eurozone’s average are in Spain, Ireland, Greece and Portugal. The
peripherial countries, troubled by the sovereign debt crisis, will have
little fiscal leeway to support employment schemes ahead, thereby
impeding a return to convergence.
Today’s data also show a significant divergence, with Germany
outpacing the recovery of the rest of the Eurozone.
In Germany, employment rose 0.2% both on the quarter and year,
while France also registered a 0.2% m/m gain to give a flat annual
reading.
On the other end of the spectrum, both Spain and Italy saw
employment levels fall by 0.2% compared to 1Q. The annual decline in
Spain, however, was much more severe at -2.4% compared to Italy’s -0.7%
figure.
Elsewhere in the Eurozone, the sharpest quarterly decline in
employment was noted in Greece at -0.9%, leaving the annual change
at-2.3%. The strongest growth rate was seen in Finland, which rose 0.4%
on the quarter, though fell 0.4% on the year.
–Frankfurt bureau; +49-69-720142; frankfurt@marketnews.com
[TOPICS: M$X$$$,M$XDS$,MT$$$$]
