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GDP, employment growth up but slowing in EU

Despite a slower third quarter, the EU’s statistics agency reports Europe’s economy is growing at a faster annual rate than the U.S., driven by investments in fixed assets and the purchase of household goods.

(CN) — The gross domestic product in the eurozone increased by 0.3% in the third quarter of 2022, a drop of 0.5% compared to the previous quarter but an increase of 2.3% over a year ago, according to data released Wednesday by Eurostat.

During the same one-year period, the larger European Union experienced GDP growth of 2.4%, although it ticked upward just 0.4% between the second and third quarters of 2022, the EU's statistics agency reported.

Comparatively, at 0.7%, GDP growth in the United States increased at a greater rate over the past three months, although at 1.9%, the year-over-year figure in America is more modest than in Europe, at least according to Eurostat. However, the U.S. government puts its annual third quarter GDP growth at 2.9%.

Among member states of the EU, Ireland led the pack with quarterly growth of 2.3%, followed by Cyprus, Malta, Romania, Luxembourg and Poland. Also performing above the EU average were Bulgaria, Sweden, Denmark, Italy and Lithuania. 

Estonia was at the bottom of the list with a quarterly decrease in GDP of 1.8%. Lativia and Slovenia also experienced decreases of more than 1%. Countries performing below the EU average also included, in increasing order of severity, Germany, Portugal, Slovakia, Belgium, Spain, France, Austria, Czechia, Netherlands, Finland, Croatia, Hungary and Greece.

Shipping containers are piled up in the harbor in Hamburg, Germany, on Oct. 26, 2022. (AP Photo/Michael Probst, File)

Meanwhile, employment growth is on a cooling trend that began after the third quarter of 2021, when it topped 1%. In the third quarter of 2022, the number of employed persons increased just 0.3% in the eurozone and 0.2% in the EU. Year-over-year growth in employment stands at 1.8% in the eurozone and 1.5% in the EU. With a 1.4% quarterly increase, Spain's employment growth topped other European countries. On the other end of the spectrum, Finland recorded a 0.8% decrease in labor market growth.

Between the second and third quarters of 2022, hours worked in the eurozone decreased by 0.1% and 0.3% in the EU, a slowdown compared to year-over-year increases of 2.1% and 1.6%, respectively. Hours worked is one measure of labor productivity, and Eurostat reported Wednesday’s data provides “a picture of [labor] input consistent with the output and income measure of national accounts.”

The report also found the primary contributors to the quarterly growth were increases in investments in fixed assets and the market value of goods and services purchased by households. To a lesser degree, there was also a small increase in government spending in the third quarter.

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