The number of employed persons in the Euro area rose by 0.3% in the first quarter of 2025 compared to the previous quarter, bringing total employment to 171.79 million, according to a preliminary estimate from Eurostat.
Euro area employment rises more than expected
This represented a notable acceleration from the 0.1% growth recorded in the fourth quarter of 2024 and surpassed market expectations of a more modest 0.1% increase. The data also marked the 16th consecutive quarter of employment growth, underscoring the continued resilience of the region’s labor market despite persistent global headwinds.
In the broader European Union, employment also expanded, albeit at a slightly slower pace of 0.2% quarter-on-quarter, reflecting the uneven performance among member states. Within the Euro area, several countries recorded robust job creation, with Spain leading the gains, where employment surged by 0.8%, reflecting ongoing strength in services, tourism, and construction. Czechia (+0.5%), Finland (+0.4%), and Sweden (+0.3%) also posted solid employment growth, supported by recovering domestic demand and improved business sentiment. Luxembourg saw a marginal 0.1% increase, reflecting stable labor market conditions.
Where employment decreased
Conversely, some economies experienced a contraction in employment, highlighting pockets of weakness across the bloc. Estonia led the declines with a 0.8% drop, followed by Poland (-0.6%), where weaker industrial activity and slowing investment weighed on labor demand. France, the Netherlands, and Lithuania each recorded a marginal 0.1% decrease, reflecting softening business confidence amid trade-related uncertainties and signs of a cooling in consumer-facing sectors.
On an annual basis, employment in the Eurozone rose by 0.8%, maintaining a stable pace of year-on-year growth. However, analysts caution that the labor market’s strength may be tested in the months ahead as the combination of elevated geopolitical risks, tighter global financial conditions, and the potential drag from new U.S. trade tariffs could dampen hiring intentions, particularly in export-dependent industries.
Nonetheless, the sustained improvement in employment has provided crucial support to household consumption, one of the key pillars of the Eurozone’s recent economic expansion. Coupled with easing inflationary pressures and improved wage dynamics in some regions, the labor market remains an important buffer against external shocks, even as growth prospects for the second half of the year remain uncertain.
