ECB Bulletin on slack in the Euro Area: -.......>

ECB: ECB Bulletin on slack in the Euro Area:

- "Although recent estimates of potential output suggest that slack is

diminishing (see Chart A), a number of factors suggest that such figures may

underestimate the degree of slack remaining in the economy. For instance,

inflation and wage pressures have remained subdued. In addition, labour supply,

participation and productivity have increased, which may support an increase in

potential output that has not yet been fully accounted for. Finally, elevated

levels of the broad measure of labour underutilisation may also have suggested a

larger degree of labour market slack than the headline unemployment rate.19 On

the other hand, survey indictors showing historically high levels of capacity

utilisation and labour shortages point to emerging tightness in euro area labour

markets".