Germany and France, the euro area’s two largest economies, returned to growth in the third quarter. Germany’s GDP rose by 0.1 per cent in the three months to the end of September, thus avoiding a technical recession.

French GDP, on the other hand, rose by 0.3 per cent, the most in over a year. This indicates that a slow recovery in the region is under way. Economists predicted third-quarter growth of 0.1 per cent for both economies.

The regions’ anaemic recovery has been in danger of faltering of late, as economic malaise reached the shores of these core countries. Given this slow growth and deflation on the horizon, the European Central Bank has undertaken unprecedented stimulus measures and urged governments to introduce structural reforms to support growth.

In the meantime, UK unemployment held steady at a six-year low of six per cent in the three months to the end of September. Moreover, wage growth accelerated as the labour market continued to improve. The data are based on ILO standards. Economists predicted the jobless rate would fall to 5.9 per cent.

Wages grew an annual rate of one per cent, faster than the 0.8 per cent forecast by economists. Basic pay, that is, excluding bonuses, grew by an annualised rate of 1.3 per cent, outstripped the rate of inflation for the first time since 2009. Britain’s inflation stands at 1.2 per cent.

Finally, US job growth exceeded 200,000 for nine straight months in October, the longest streak since 1994. According to the US Labour Department, employers created 214,000 new jobs in the review month, as jobs growth increased at a brisk pace.

At the same time, the unemployment rate fell to a six-year low of 5.8 per cent, from 5.9 per cent in September. This underlines the resilience of the US recovery as the economy expanded by 3.5 per cent in the third quarter, notwithstanding slowing growth elsewhere.

In spite of the brightening labour picture, wage growth remained tepid, suggesting that the Federal Reserve will come under less pressure to start raising interest rates.

This article was compiled by Bank of Valletta for general information purposes only.