Eurozone Employment Falls Most On Record

eurozone 112819 14aug20

Employment in the euro area declined at a record pace in the second quarter as the imposition of the coronavirus containment measures dragged the currency bloc into a historic recession, flash estimates from Eurostat revealed Friday.

Another report from Eurostat showed that the trade surplus nearly doubled in June from the previous month as the growth in exports far exceeded the rise in imports.

Data showed that employment dropped 2.8 percent from the previous quarter, the biggest since the series began in 1995. Employment decreased 0.2 percent in the first quarter.

About 4.5 million jobs were lost in the second quarter due to the lockdown to battle the Covid-19 pandemic.

On a yearly basis, employment decreased 2.9 percent versus a 0.4 percent rise in the preceding period.

Data released earlier showed that the jobless rate increased at the end of the second quarter despite the furlough programs implemented by the member countries. In June, the jobless rate rose to 7.8 percent.

The statistical office on Friday also confirmed the deepest economic contraction for the second quarter.

Gross domestic product fell 12.1 percent sequentially in the second quarter, following a 3.6 percent drop in the first quarter. This was the sharpest decline seen since the series began in 1995.

Year-on-year, GDP was down 15 percent versus a 3.1 percent decline a quarter ago. This was also the sharpest decrease since 1995. Both quarterly and annual rates matched the preliminary estimate released on July 31.

Among the big-four, Spain posted the biggest GDP fall of 18.5 percent. Economies of Germany and France shrank 10.1 percent and 13.8 percent, respectively. Italy's GDP contracted 12.4 percent.

Looking ahead, the recovery in both economic activity and employment is likely to vary substantially between Eurozone countries, Jessica Hinds, an economist at Capital Economics, said.

But for all euro area countries, a major second wave - which is arguably already underway in Spain - remains the biggest threat to the nascent recovery, the economist added.

In June, the trade surplus rose to a seasonally adjusted EUR 17.1 billion from EUR 8.6 billion in May, data showed.

Exports increased 11.2 percent on month and imports grew 5.7 percent in June.

On an unadjusted basis, exports and imports decreased 10 percent and 12.2 percent annually, respectively.

As a result, the trade surplus climbed to EUR 21.2 billion from EUR 19.4 billion last year.

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