Central Banks
Disappointing Euro-Area Productivity Complicates ECB’s Challenge
- Labor productivity in the second quarter weaker than expected
- Economists discuss implications for further interest-rate cuts
An assembly line in Gothenburg, Sweden
Photographer: Hollie Adams/BloombergThis article is for subscribers only.
Euro-zone productivity barely improved in the second quarter and again missed the European Central Bank’s expectations – a blow for its efforts to bring inflation back to 2%.
Labor productivity per person fell by 0.4%, according to new data published by the ECB. That follows a decrease of 0.5% in the first three months of 2024 and compares to a minus of only 0.3% envisaged in the ECB’s June staff projections.