Eurozone unemployment lowest for three years

Unemployment in the eurozone fell to its lowest level for three and a half years in July, raising hopes that economic recovery in the single currency area is taking hold, official data showed on Tuesday. 

PHOTO: BLOOMBERG

SEP 1, 20157:45 PM

[BRUSSELS] Unemployment in the eurozone fell to its lowest level for three and a half years in July, raising hopes that economic recovery in the single currency area is taking hold, official data showed on Tuesday.

Joblessness in the 19-nation bloc fell to 10.9 per cent in July from 11.1 per cent in June, the first time it has dipped below 11 per cent since February 2012, the EU statistics agency Eurostat said.

However youth unemployment was at a still high 21.9 per cent.

As usual, the level of joblessness varied widely across the eurozone, but the sharp fall will boost hope that Europe is emerging from its prolonged debt crisis.

However, analysts cautioned that any improvement in the jobs market remained modest and came after disappointing second quarter economic growth data.

"We do not expect the eurozone's labour market recovery to gain much pace in the coming months," said Jessica Hinds, European economist at Capital Economics.

"The employment components of survey indicators... only nudged up in August and remain consistent with pretty weak annual employment growth in the near term," she said.

In contrast to the fall in joblessness eurozone-wide, unemployment rose in France to 10.4 per cent, in Austria to 5.8 per cent and Finland to 9.7 per cent.

The highest rate was in debt-stricken Greece, at 25 per cent in May, the latest data available, but down from 25.6 per cent a month earlier.

Youth unemployment in Greece stood at 51.8 per cent and at a still huge 48.6 per cent in Spain, another country struggling to reignite job creation after the crisis.

The lowest rate in the bloc was in powerhouse Germany, unchanged at 4.7 per cent.

In welcome news, Italy, the eurozone's third biggest economy, saw joblessness fall to 12 per cent, snapping two consecutive months of increases despite a wave of job reforms.

Youth unemployment in Italy still stood at a high 40.5 per cent.

EU-wide, unemployment in the 28 member states fell by 0.1 per cent to 9.6 per cent in June, the lowest level since June 2011.

Last month, data showed that growth in the eurozone slowed slightly in the second quarter to 0.3 per cent, coming in at the bottom end of analyst forecasts.

The lack of a sharp improvement in the eurozone economy comes despite a massive European Central Bank stimulus programme.

AFP