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Eurozone jobless rate at lowest since 2008 … MARKETWATCH July 02, 2018 at 10:49AM

Eurozone jobless rate at lowest since 2008 … MARKETWATCH

 

Eurozone jobless rate at lowest since 2008

By Paul Hannon

The number of people without work in the eurozone fell in May, a sign that a slowdown in economic growth during the first quarter hasn’t derailed the currency area’s broader
recovery.

The European Union’s statistics agency said Monday the numbers of unemployed across the 19 countries that use the euro fell 125,000 from April, leaving the jobless rate unchanged
at 8.4%.

However, Eurostat cut its estimate of the jobless rate in April from 8.5%, and the new figure is the lowest since the final month of 2008.

The continued decline in the jobless rate will be welcome news for policy makers at the European Central Bank, who have pinned their hopes on rising wages to ensure inflation settles at their target over coming
years.

Lower unemployment rates usually translate into faster wage rises, although, as in the U.S., the relationship between the two has been weaker in recent years than it was prior to the global financial crisis. ECB
officials think that’s because there is a lot of slack in the jobs market that isn’t picked up by the headline jobless rate, such as people who are working, but aren’t putting in as many hours as they would like.

The eurozone’s unemployment rate remains above its equivalent in the U.S., which stood at 3.8% in May. Some eurozone members, such as Germany, match or better that. But many southern European countries continue
to experience jobless rates that are much higher, with the Greek level above 20% and Spain’s above 15%.

The problem is more acute for younger Europeans, with roughly a third of Italians and Spaniards under the age of 25 without work. That has helped feed the rise of populist and antiestablishment parties in Italy
elsewhere.

 

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