Eurozone GDP beats forecasts; jobless rate below 9% for first time since 2009

Economic growth in the euro area came in ahead of expectations in the third quarter, with the latest monthly unemployment figures also beating estimates in a mixed set of data releases.

Preliminary eurozone and EU GDP rose 0.6 per cent in the third quarter from the previous one, data from Eurostat showed on Tuesday. That is down slightly from the upwardly-revised 0.7 per cent quarter-on-quarter growth in the second quarter but ahead of a consensus estimate of 0.5 per cent.

The euro area unemployment rate also dropped — to 8.9 per cent.

It is the first time the rate has fallen below the 9 per cent mark since the start of 2009, and beat expectations of 9 per cent unemployment. Across the wider European Union, unemployment held steady from August at 7.5 per cent — the lowest rate since November 2008 — led by a 2.7 per cent unemployment rate in the Czech Republic and 3.6 per cent in Germany.

The solid GDP reading reflects a slight slowdown in France’s third quarter GDP reading earlier this morning — which ticked down to a still-solid 0.5 per cent from 0.6 per cent in the previous quarter as net exports slowed — but as Pantheon Macroeconomics point out, the German data in the release is a confidential estimate. The standalone figures for Germany are not released until next month.

The latest reading may still be pushed up further. Eurozone GDP first estimates have been consistently revised upward, as this helpful chart from Frederik Ducrozet‏, an economist at Pictet, shows:

Year-on-year, euro area GDP picked up to 2.5 per cent in the third quarter, up from a 2.3 per cent annual increase in the second quarter and again beating expectations of a 2.4 per cent rise.

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