ECB Study: Euro area employment rising faster than expected - RTRS

Latest research conducted by the European Central Bank (ECB) showed on Wednesday that employment in proportion to GDP growth is now rising as fast if not faster than before the 2007 debt crisis, particularly in places like Germany and Spain where labour market reform has increased flexibility, Reuters reports.

The ECB noted, “The evidence suggests that recent reforms have helped to increase employment. Job gains are also partly due to structural changes under way across the euro area, including ongoing sectoral shifts and compositional changes to the workforce.”

“Stronger employment growth has doubtless provided support to household incomes, but has also further weakened aggregate productivity growth, which was already notably weaker - even at the sectoral level - than in the pre-crisis period on both sides of the Atlantic. These common trends in productivity growth may imply risks to the long-term growth outlook,” ECB added.