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INNOVATION 10.12.2020 IN the third quarter of 2020, seasonally adjusted GDP increased by 12.5% in the euro area and by 11.5% in the EU com- pared with the previous quarter, accord- ing to an estimate published by Eurostat, the statistical office of the European Un- ion. ese were by far the sharpest increas- es observed since time series started in 1995, and a rebound compared with the second quarter of 2020, when GDP had decreased by 11.7% in the euro area and by 11.3% in the EU. Compared with the same quarter of the previous year, seasonally adjusted GDP decreased by 4.3% in the euro area and by 4.2% in the EU in the third quarter of 2020, which represents a partial recov- ery after 14.7% and 13.9% respectively in the previous quarter. During the third quarter of 2020, GDP in the United States increased by 7.4% compared with the previous quarter (af- ter -9.0% in the second quarter of 2020). Compared with the same quarter of the previous year, GDP decreased by 2.9% (after -9.0% in the previous quarter). GDP growth by Member State France (+18.7%), Spain (+16.7%) and Italy (+15.9%) recorded the sharpest in- creases of GDP compared to the previ- ous quarter. ese countries were also among the highest decreases in the sec- ond quarter. Greece (+2.3%), Estonia and Finland (both +3.3%) and Lithuania (+3.8%) had the lowest increases of GDP. Except for Greece, which registered a decrease of 14.1%, these other countries also had less pronounced declines dur- ing the second quarter. GDP components and contributions to growth During the third quarter of 2020, household final consumption expendi- ture increased by 14.0% in the euro area and by 13.2% in the EU (after -12.4% in the euro area and -12.0% in the EU in the previous quarter). Gross fixed capi- tal formation increased by 13.4% in the euro area and by 11.7% in the EU (after -16.0% and -14.3% respectively). Exports increased by 17.1% in the euro area and by 17.2% the EU (after -18.9% in both zones). Imports increased by 12.3% in the euro area and by 12.9% in the EU (af- ter -18.2% and -18.0% respectively). Household final consumption expendi- ture had a very strong positive contribu- tion to GDP growth in both the euro area and the EU (+7.3 and +6.9 percentage points – pp, respectively) and the con- tribution from gross fixed capital forma- tion was also positive in both zones (+2.8 and +2.5 pp respectively). e contribu- tions from the external balance and gov- ernment final expenditure were positive in both zones, while the contribution of changes in inventories was slightly nega- tive in the both zones. GDP levels in the euro area and EU Based on seasonally adjusted figures, GDP volumes recovered significantly in the third quarter of 2020 compared to the previous quarter. ey are however still 4.4% below the level at the end of last year for the euro area and EU, slightly above the levels of first quarter 2017. For the United States, GDP was 3.5% below the level of the fourth quarter of 2019, which is the lowest level since the first quarter of 2018. Employment growth in the euro area and EU e number of employed persons in- creased by 1.0% in the euro area and by 0.9% in the EU in the third quarter of 2020, compared with the previous quar- ter. ese were the strongest increas- es observed since time series started in 1995. In the second quarter of 2020, em- ployment had decreased by 3.0% in the euro area and by 2.8% in the EU. Compared with the same quarter of the previous year, employment decreased by 2.3% in the euro area and by 2.0% in the EU in the third quarter of 2020, after -3.1% and -2.9% respectively in the sec- ond quarter of 2020. While the impact of the COVID-19 pandemic on employment in persons was mitigated by government support schemes, the changes in hours worked were much more pronounced. Hours worked increased by 14.8% in the euro area and by 11.9% in the EU in the third quarter of 2020, compared with the pre- vious quarter. Compared with the same quarter of the previous year the declines were 4.5% in the euro area and 3.7% in the EU respectively (see annex table on employment in hours worked). ese data provide a picture of labour input consistent with the output and in- come measure of national accounts. Employment growth in Member States In the third quarter of 2020, Ireland (+3.3%), Spain (+3.1%) and Austria (+3.0%) recorded the highest growth compared with the previous quarter. e largest decreases were observed in Lith- uania (-1.9%), Romania (-1.0%), and Bul- garia (-0.5%). e decrease in hours worked was gen- erally much more pronounced for all Member States (see annex table on em- ployment in hours worked).Employment levels in the euro area and EU Based on seasonally adjusted figures, Eurostat estimates that in the third quar- ter of 2020, 205.2 million people were employed in the EU, of which 157.4 mil- lion were in the euro area. In relation to the COVID-19 pandem- ic, employment in persons is 3.6 million in the euro area (-2.2%) and 4.3 million (-2.1%) in the EU below the level of the fourth quarter of 2019 . Compared to the fourth quarter of 2019, the number of hours worked was 4.6% lower in the euro area and 3.6% lower in the EU. Evolution of labour productivity in the euro area and EU e combination of GDP and employ- ment data allows an estimation of labour productivity. e analysis of growth compared to the same quarter of the previous year shows that productivity growth (based on employed persons) fluctuated around 1% for both zones be- tween 2013 and 2018. In relation to the COVID-19 pandem- ic, productivity based on persons recov- ered from the previous sharp drop in the third quarter 2020, but remained nega- tive compared to the same quarter of the previous year with 2.2% for the euro area and -2.3% for the EU. Based on hours worked the impact on productivity was more limited. In the euro area there was a slight increase in productivity based on hours worked compared to the same quarter of the previous year of 0.4%, while for the EU productivity declined slightly by 0.5%. GDP up by 12.5% and employment up by 1.0% in the euro area In Q3 2020, in the euro area there was a slight increase in productivity based on hours worked compared to the same quarter of the previous year

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