The euro area economy expanded as initially estimated in the third quarter largely driven by household spending, estimates released by Eurostat showed on Tuesday.
Gross domestic product grew at a steady pace of 2.2 percent in the third quarter. The estimate for the second quarter was revised up from 2.1 percent and the third quarter rate was confirmed by Eurostat.
On a yearly basis, GDP advanced 3.9 percent instead of 3.7 percent expansion estimated previously. However, this was slower than the second quarter’s 14.4 percent increase.
With Covid cases rising, governments tightening restrictions, and supply problems constraining output, the economy looks set for a very weak fourth quarter, Jack Allen-Reynolds, an economist at Capital Economics.
Household consumption growth improved to 4.1 percent from 3.9 percent. Meanwhile, the increase in government spending eased to 0.3 percent from 2.1 percent.
On the other hand, gross fixed capital formation dropped 0.9 percent, reversing a 1.3 percent rise in the second quarter.
Both exports and imports grew at slower rates in the third quarter. Shipments were up 1.2 percent and imports gained 0.7 percent.
Eurostat estimates showed that 161.0 million people were employed in the third quarter. In relation to the COVID-19 pandemic, employment remained 0.3 million below the level of the fourth quarter of 2019.
The number of employed persons increased by 0.9 percent sequentially and increased 2.1 percent from the same period last year.
The combination of GDP and employment data allows an estimation of labor productivity. Productivity based on persons increased by 1.8 percent from the same period last year. Based on hours worked, productivity rose 0.8 percent annually.
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