Eurozone: Disparate improvements in labour market – BNP Paribas
Louis Boisset, analyst at BNP Paribas, explains that the Eurozone employment has risen vigorously since 2013, and the unemployment rate has dropped to a 10-year low.
“Yet broader indicators suggest that labour market slack is still high in some countries, since the improvement has not been uniform across the board.”
“In the midst of an economic slowdown, the big question is whether the rebound in wage growth will continue.”
Although labour market slack has declined over the past five years, it is still high in some countries and could continue to squeeze wage dynamics. At the same time, the increase in the share of fixed-term contracts to the detriment of open ended contracts, and the high level of part-time job contracts could reduce the bargaining power of employees in these countries. All other factors being the same, with the exception of Germany, the acceleration in wage growth observed in the eurozone over the past two years could be hampered in the short-term.”