Economic developments in the euro area Euro Area Macroeconomic Developments Division Frankfurt am Main 1 October 2009

2 Real GDP growth Sources: Eurostat and ECB calculations. Last observation: Q (quarter-on-quarter growth rate and quarterly percentage point contributions; seasonally adjusted)

3 Surveys Purchasing Managers' Indices (PMIs) for the euro area (monthly data; seasonally adjusted) Source: Markit. Latest observation: September expansion contraction

4 GDP – Consumption Private consumption and retail trade (quarter-on-quarter growth; contributions) Sources: Eurostat and ECB. Last observation: Q for Consumption, July 2009 for Retail sales and June 2009 for Retail sales plus car registrations.

5 GDP – Consumption Source: ACEA, A.A.A. and ECB calculations. Latest observation: June Note: Diamonds show the latest value of the index. New Passenger Car Registrations (WDA&SA indices of 3-month moving averages, January 2008=100) Car registration - euro area VS non- euro area.

6 GDP and Employment (q-o-q % growth) Sources: Eurostat and ECB. Last observations: 2009Q2.

7 Investment (q-o-q % growth) Sources: Eurostat and ECB. Last observations: 2009Q2.

8 GDP forecasts

9 HICP inflation and contributions from energy and foods Source: Eurostat.. Last observation: August 2009; September 2009 for Overall HICP. (percentage points, annual percentage changes)

10 Producer prices and survey data on prices PMI Price survey data and Producer Price Inflation – Manufacturing Sector (Threshold-adjusted diffusion indices; annual growth rate in %) Source: Markit, Eurostat. Latest Observation: September 2009 for PMI, July 2009 for PPI. Upward price pressure Downward price pressure

11 Unemployment and labour costs

12 Profits

13 Longer-term inflation expectations Source: ECB and Reuters.

14 HICP forecasts

Labour markets and productivity EU Countries Division Frankfurt am Main 1 October 2009

16 Employment – sectors and countries Employment growth (annual growth rates) Growth by sectorContributions by country

17 Hours and employment Employment growth by hours worked and persons (annual growth rates) Source: Eurostat (STS and ESA databases). Note: Hours worked in total industry. DE and IT vs. ES - reflecting short-time work arrangements

18 Structure of employment growth Employment by gender (annual growth rates) Source: Eurostat (LFS database). Employment by age (annual growth rates)

19 Structure of employment growth Employment by level of educational attainment (annual growth rates) Source: Eurostat (LFS database). Employment by contract type (annual growth rates)

20 Unemployment - countries Monthly increase in unemployment (thousands of persons) Source: Eurostat.

21 Unemployment - structure Unemployment (% of labour force) Source: Eurostat and ECB. By ageBy gender

22 Outlook - Unemployment projections Projected increase in the unemployment rate – EC (level in 2008 and 2010) Euro Area (EA16)Non-EA EU member states Source: Eurostat (LFS and AMECO databases). Note: 2008 value refers to the 2008Q4.

23 ULCs and profit margins

24 Labour Costs

25 Cost cutting strategies (WDN)

26 Labour productivity Source: Eurostat and ECB calculations Labour productivity per person in the euro area and the US: 1999Q Q2 (annual percentage change) Changes in output and employment in the euro area and the US: 2007Q3-2009Q2 (annual percentage change)

27 Hourly labour productivity in the euro area* and the US: 2001Q1-2009Q2 (annual percentage changes) Sources: Eurostat, BLS, OECD, and ECB calculations. Latest observations: 2009Q2; * Hourly productivity is not available for all euro area countries. Euro area 3 refers to Germany, France and Italy; Euro area 8 also includes Austria, Cyprus, Finland, Ireland and Slovakia Hourly labour productivity, euro area vs U.S.

28 Labour productivity – sectors and countries Source: Eurostat and ECB calculations Sectoral contributions to aggregate labour productivity in the euro area (annual percentage change) Country contributions to euro area labour productivity in industry (excluding construction) (annual percentage change)

29 Productivity – a decomposition

30 Wage rigidity (WDN)