Eurozone GDP & Unemployment Unchanged in Q3

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The eurozone will be releasing its second revised estimates on the gross domestic product data. The report covers the economic performance for the third quarter ending September.

This will be the second revision to the GDP. The eurozone’s preliminary GDP estimates were first released on October 31st. The region’s GDP was rose by 0.2% during the three month period.

It was a surprise as economists forecast that growth would slow to a pace of just 0.1%.

The pace of growth in the third quarter was the same as it was in the second-quarter period. On a year over year basis, the eurozone’s annual GDP growth rate is 1.3%.

Euro area GDP
Euro area GDP Growth

The second revision of the GDP figures will not bring up much excitement. No changes are forecast as economists expect that the quarterly growth rate will be steady at 0.2%.

The eurozone’s economy has been in a downward spiral since the start of this year. There were signs of a slowdown already from late last year. But, for the most part, officials brushed aside the data.

The main narrative was that the slowdown came from Germany. And this was because of the new emission standards for automobiles. However, over the course of the year, the growth rate began to steepen even further.

At one point, there were warning signs issued that Germany’s economy could slip into a recession. Given that it is Europe’s largest economy, the risks were that a slowdown in German growth would also pull down the growth figures for the economic bloc.

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Quite recently, the European Commission gave out its Autumn report. According to the estimates, the EU Commission expects growth in the eurozone to slow to 1.1% this year. This means that there is a strong chance for GDP figures to slip, if not in the third quarter, then probably during the fourth quarter of the year.

Quarterly Employment Change to Hold Steady

Besides the GDP report, the eurozone will be publishing its quarterly statistics on the employment change in the region.

Economists forecast that the eurozone’s employment change on a quarterly basis will be 0.2%. This will mark the same pace of change as in the second quarter.

But the quarterly employment change is also slowing. In the first quarter, the employment change was at 0.3%. But after this period, it began to slow. The employment change is a measure of change in the number of people employed during the period.

Compared to the same quarter from a year ago, employment change is up 1.1% annually. But this was slower compared to a 1.3% change in the first quarter of the year.

Eurozone Unemployment Change
Eurozone Unemployment Change

For the moment, there are still no indications of a recession or slowdown in the labor markets. But the data will be closely watched in relation to the larger scope of the economic reports.

More importantly, the newly appointed ECB President, Christine Lagarde will be facing challenges. With the ECB restarting its QE program, Lagarde will be facing dissent from within the ECB’s governing council.

So far, growth has managed to buck the trend. While many had expected growth to fall or stagnate in the third quarter, the actual data proved otherwise. Besides the domestic issues, there are also global factors at play.

For the moment, the developments in the US-China trade talks remain optimistic. With the Fed lowering rates, conditions for borrowing are also easier to access. These global risks could, therefore, dissipate in the near term.

In terms of the market impact, if today’s report comes in line with the expectations, it will not do much for the markets. But a disappointment could certainly rake up the ECB’s policies for sure.

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