Eurozone sees positive employment trend, but consumption lags

The eurozone received mixed economic signals Thursday, with new EU data showing that the jobless rate reached a four-year low in November, even as retails sales fell for the third month in a row.

Unemployment in the eurozone fell to 10.5 per cent in November, the lowest rate since October 2011, according to EU statistics agency Eurostat.

Meanwhile, the volume of retail trade fell 0.3 per cent in the 19 countries of the currency bloc month-on-month, disappointing analysts who had expected an increase of 0.2 per cent.

There might not be much clarity ahead, observers warned. Consumer spending will continue to get support from labour market improvements, analysts at Capital Economics said in London.

"But the big picture is still that unemployment rates in most eurozone countries remain too high to generate a meaningful pick-up in wage growth," the research company's experts wrote.

The comments came as data showed that the number of unemployed people in the currency bloc fell to 16.92 million in November, 130,000 less than the previous month.

Analysts had expected unemployment to stay level from the previous month. EU statistics agency Eurostat said 10.6 per cent were without jobs in October, 0.1 per cent fewer than previously announced.

During the past year, joblessness decreased, especially in Spain, Bulgaria and Italy, while rising in Austria and Finland.

Youth unemployment in the eurozone also remained high, at 22.5 per cent.

Germany remained the country with the best labour data, recording an overall jobless rate of 4.5 per cent and youth unemployment of 7 per cent.

On the other extreme, 24.6 per cent were without jobs in Greece in September, the highest national rate in the eurozone. At 45.9 per cent, youth unemployment was more than double the country's overall rate, according to the latest available monthly data.

In Spain, joblessness among young people stood at 47.5 per cent.

"Although the increased pace of improvements in the labour market is an encouraging sign, it is unlikely that this will lead to higher inflation in the months ahead," ING Bank analyst Bert Colijn said, pointing to a "fair amount of slack" remaining in the labour market.

Last update: Fri, 24/06/2016 - 08:49

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