Recovery Continues as Eurozone Adds Jobs and Widens Trade Surplus

The eurozone reported a rise in employment levels for the second quarter in succession, with the region also reporting a widening trade surplus.

Levels of employment in the eurozone grew by 0.1% in the first quarter, or 0.2%, year-on-year.

Eurostat, the statistical office of the European Union, reported that for the wider EU area, employment grew by 0.7% in the first quarter of the year.

The most positive employment growth figures were in the EU: Hungary (up 1.5%) and Latvia (up 0.8%). In Cyprus, however, unemployment rose by 1.2%, with Italy shedding 0.1% of its employment rate.

Chris Williamson, chief economist at Markit Economics, tells IBTimes UK that while economic growth remains relatively anaemic, it is finally feeding back into the labour market.

"Quarter two is looking like the best economic growth for three years, we're forecasting growth of 0.5%. Employment tends to lag growth but we're seeing a feed through finally taking place and that bodes well for the long-term outlook. More jobs equal more security and more consumer spending. The recovery should gain sustainability."

The eurozone's trade in goods surplus rose to €15.7bn in April, up €1.7bn on March's stats. This was mainly driven by a fall in imports of 0.5%.

The wider EU managed to grow its exports to China by 11% over the first quarter of the year, with South Korea by 13% and Switzerland by 7%.

However, the ongoing Ukraine crisis has seen Russian exports fall by 11% over the quarter, with Russian imports falling by 10%.

All in, the stats point to a continued – if gradual – recovery for the eurozone and EU at large. The eurozone's GDP growth was 0.2% for the first quarter (0.2%), but Williamson feels the underlying picture was healthier than that.

"There were several factor that subdued growth. There was a big fall in energy production in the Netherlands, which supplies a lot of gas to the region. If you strip out effects like that the underlying picture was more buoyant. We will see better growth in the second quarter and less calls on policymakers to do more," he said.