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Employment and Social Situation: Quarterly Review indicates little improvement despite first signs of recovery

31/03/2014 Employment and Social Situation: Quarterly Review indicates little improvement despite first signs of recovery

The recent economic recovery has not yet been able to create new jobs and the social situation in the EU shows little signs of improvement so far, according to the European Commission's latest Employment and Social Situation Quarterly Review.

This analysis also points to an expected increase in poverty levels and a slight improvement in the effectiveness of social protection expenditure in 2013, even if its impact remains very weak. The Review provides empirical evidence that the crisis at its height had the strongest adverse impact on the employment situation of men and young people.

The latest Quarterly Review stresses that the improvements in the EU labour markets are still weak. Employment showed the first signs of stabilisation in 2013, with a 0.1% growth in the second half of the year.

Rising financial distress

The income that households have at their disposal is lagging behind the growth in Gross Domestic Product (GDP). In 2013, the real Gross Disposable Household Income of households (GDHI) continued to decline year-on-year in the Euro area in real terms, though at a slower pace than before.

Another worrying trend is the continuous increase in financial distress since 2010, with more and more of the population reporting the need to draw on their savings and, more recently, even to run into debt to pay for everyday living costs.

Significant decrease in job stability

January 2014 show that unemployment is still at record high levels, with around 26 million people (10.8 % of the economically active population) in the EU looking for work. In several Member States, unemployment remains close to the historically-high levels first seen in the current crisis. The Review also shows increasing use of temporary and part-time work.

There is evidence that temporary employment has become less of a stepping-stone towards a permanent job since the onset of the crisis. At the same time, job stability has decreased significantly, especially for men and the young, and divergences between Member States became more pronounced.

Poverty levels expected to increase

Poverty and social exclusion continued to rise in 2011 and 2012 and, according to the latest available data, a further increase is estimated in 2013 for those countries where economic and labour market conditions have continued to deteriorate.

Impact of social protection expenditure

The stabilisation impact of social protection expenditure remained very weak in 2013, growing much less than expected, despite a slight improvement. The analysis reflects significant differences among countries.