Euro zone growth downgraded but employment holding up

Gross domestic product in the first three months grew by 0.3 percent, below an initial estimate for 0.4 percent, but that was still an improvement on previous quarter as industry finally expanded and employment growth also picked up.

Compared with a year earlier, the bloc's economy expanded by 1.2 percent, the same as three months earlier, broadly in line with what the ECB considers the bloc's potential.

While the euro zone has consistently underperformed the U.S. in recent years, the 0.3-percent quarterly growth rate is far better than the 0.3-percent contraction reported in the U.S., which in great part was a reflection of surging imports ahead of tariffs.

Euro zone employment, meanwhile, expanded by 0.3 percent compared with the previous quarter, the highest figure in four quarters, likely easing fears that weak growth could finally prompt firms to start shedding workers.

Unemployment has been holding at record lows all year, confounding some expectations that, with no prospect for a meaningful rebound in growth, firms could reassess their plans to keep hanging on to workers.

Among the bloc's biggest economies, Germany grew by 0.2 percent, France by 0.1 percent, Italy by 0.3 percent and Spain by 0.6 percent compared to the previous quarter.