An analysis of recent Eurostat figures shows ongoing positive developments in the European labour market. The continuing strong employment growth in Spain and the recent labour market recovery in Germany and Poland have been the main drivers behind the good overall EU performance.

Employment reached 222 million in the second quarter of 2007, reflecting an annual increase of over 3 million and an increase of 1 million from the previous quarter. Among the key factors influencing the improving employment situation in three large Member States, Germany, Poland and Spain, have been good levels of economic growth over the recent quarters. In Germany the limited growth of labour costs also contributed.

At the same time, strong employment expansion continues in most of the new Member States (with the exception of Hungary and Estonia). Reflecting the improvement in labour market conditions, by the second quarter of 2007 the overall EU employment rate had increased to 65.3%, up from 64.3% one year earlier.

The average EU unemployment rate recorded yet another drop in the third quarter of 2007 to reach 7.1%, down from 8.1% a year earlier, with almost all Member States recording a fall in their national rates. Poland has seen by far the strongest decline, with unemployment falling to 9.1%, down 4.2 percentage points over the year, due to strong growth (6.7%). So only Slovakia now has a double-digit unemployment rate (11.1%). Another important factor has been the strong fall in German unemployment over the past year (down by 1.4 percentage points) mirroring the growth in employment.