Research Briefing | Jul 14, 2021

Eurozone | Why the labour market will recover faster than usual

Ipad Frame-Eurozone-Why-the-labour-market-will-recover-faster-than-usual

The eurozone labour market is heating up. We expect around 2 million jobs will be created from Q2 2021 until the end of the year, recovering almost two-thirds of the jobs lost since the coronavirus pandemic hit. Employment should return to pre-crisis levels by H2 2022, which is a markedly stronger performance than we had expected a few months ago.

What you will learn:

  • The labour market has continually performed better than expected as the emergency measures introduced during the pandemic, including furlough schemes, prevented mass layoffs.
  • Households’ unemployment expectations are now close to record lows and firms’ hiring intentions are elevated across industries. So, we expect labour market strength to continue into next year.
  • We see some risks to the labour outlook. Prematurely withdrawing the emergency support could hurt economic sentiment and put firms’ liquidity under pressure.
Back to Resource Hub

Related Services

Australian Home

Post

Terms of trade will lift income but challenge Australian households

Australia's terms of trade (the ratio of export prices to import prices) increased sharply through the pandemic due to a combination of strong demand and disrupted supply in markets for Australia's major commodity exports. We had anticipated a correction in the terms of trade over 2022, but the Russian invasion of Ukraine and associated volatility in commodities markets has seen the terms of trade spike again.

Find Out More
ECB

Post

Eurozone: ECB minutes indicate that July rate hike is a near-certainty

The minutes from the April ECB meeting confirm the hawkish tilt initiated a few months ago continues to gain momentum. With a majority of the council increasingly concerned about the inflation outlook, this makes an interest rate hike already in July almost certain. This should not come as a surprise, however, as recent developments render hawks' case arguably easier to make.

Find Out More