Eurozone unemployment nears five-year low

Jake Cordell
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The Eurozone economy could be heading in the right direction
The Eurozone economy could be heading in the right direction (Source: Getty)

Unemployment across the Eurozone dropped to its lowest level in nearly five years in May.

Across the single currency bloc, the rate of joblessness was 10.1 per cent - down from 10.2 per cent in April - in another sign that the Eurozone economy is heading in the right direction.

The fall takes the rate of unemployment to its lowest level in 58 months, though still significantly above its immediate pre-recession rate of below 7.5 per cent. There are 1.4m fewer people unemployment than in May last year.

Read more: Eurozone residents twice as likely to be out of work than in UK

Malta boasted the lowest rate of unemployment in the single currency area on 4.1 per cent, with Germany the only other country to fall below five per cent. Greece remained the worst performing, with one in four people unemployed.

After posting stronger growth figures in the first quarter than any other major developed economy and returning to inflation in June, the fall in unemployment will be another welcome boost to the area, which has been plagued by low growth in recent years.

However, Stephen Brown, an economist at Capital Economics, said despite the fall "there is still too much slack to meaningfully boost wage growth", implying domestic demand may remain dampened and inflation below the European Central Bank's "close to two per cent" target.

In the decade before the crisis, the Eurozone averaged an unemployment rate of 8.8 per cent.

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