The number of employed in the euro zone fell for the first time on record on a quarterly basis in July-September, pointing to a deepening weakness of consumer demand and strengthening the case for lower ECB interest
rates.
The European Union's statistics office said employment fell by 0.1 per cent of the workforce, or 80,000 people, against the second quarter to 146.1 million, mainly pulled down by falls in Spain, Portugal and Finland.
It was the first quarterly drop since Eurostat records began in 1995.
"Deteriorating labour markets will undoubtedly weigh on euro zone consumer spending, countering the boost to purchasing power over the coming months from sharply retreating inflation," said Howard Archer, economist at Global Insight.
"In addition, falling employment will increasingly undermine workers' bargaining power ... and ensure that wage moderation continues despite recent extended high inflation," he said.
"This further reinforces the case for the European Central Bank to cut interest rates again in January, and we expect a 50 bps reduction from 2.50 to 2 per cent," Mr Archer said.
The ECB has already cut by 175 basis points in three moves since October as the euro zone economy contracted 0.2 per cent in the third quarter following a similar shrinkage in the second, pulling the 15-member area into its first recession.
In the whole European Union of 27 states, employment remained flat in the third quarter against the second at 226.7 million people.
Within the euro zone, employment fell 0.8 percent on the quarter in Spain, 0.7 per cent in Portugal and 0.2 per cent in Finland. Employment in the biggest economy, Germany, rose 0.3 per cent on the quarter and was flat in France and Italy - the second and third biggest economies.
Outside the euro zone, the number of people with jobs fell 0.3 per cent in Britain and 1.9 per cent in Latvia.
Reuters