• Eurozone GDP growth is causing concern, but the relative resilience of employment continues to surprise.

  • This trend is nothing new. The negative impact on employment of previous crises has been fairly restrained.

  • Despite considerable difficulties in the sector, manufacturing employment is holding up particularly well.

  • The slowdown in productivity gains could, in the short term at least, help drive the growth in jobs.

  • Slower growth in hours worked and low-skilled jobs: a possible labour hoarding phenomenon is under way in Eurozone companies.

Since the end of 2017, economic growth in the Eurozone has decreased significantly. From 0.8% (q/q), GDP growth has dropped to just 0.2% in recent quarters. The manufacturing sector, which went into recession in the second half of 2018, is the main source of concern. Although activity in the services sector has slowed, it is still holding up. The resilience of employment against this background is crucial and continues to surprise. Although it has slowed, growth in total employment in the Eurozone has remained relatively robust and above its long-term average (Figure 1). In Q3 2019, total employment grew by 1.0%1 (year-on-year, after 1.2% and 1.4% in Q2 and Q1 2019 respectively), from an average of 0.7% since 2011. Is this limited and slow adjustment of employment unprecedented in the Eurozone? Are different sectors seeing specific developments? How can we explain such resilience? Can this situation last? We will attempt to answer all of these questions.

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