Eurozone unemployment fell further in June to reach its lowest level since February 2009, continuing the trend of a strengthening European economy.
Unemployment reached 9.1 per cent in June, down from 9.2 per cent in May, according to the European Commission. The fall was greater than expected according to economists’ consensus expectations.
Meanwhile the rate of inflation rose to 1.3 per cent in July, according to preliminary estimates also published today by the European Commission.
The data add further detail to a picture of a European economy in the midst of a period of strengthening growth and growing optimism.
The jobless rate has fallen steadily since peaking in April 2013, after the Eurozone sovereign debt crisis threatened to lead to the break-up of the single currency.
The prospect of renewed emphasis on European integration since the victory of Emmanuel Macron in May’s French presidential elections and other defeats for populist politicians in Austria and the Netherlands have added to the feeling that the continent may be starting to leave behind the legacy of the crash, a decade on.
Last week’s return to international bond markets by Greece, the Eurozone’s basket case economy, has added to the feeling of rebounding optimism. However, Greek unemployment still remains at 21.7 per cent while in Spain it remains at 17.1 per cent.
Across the European Union as a whole, including Britain, unemployment fell to its lowest since December 2008, at 7.7 per cent.
However, the prospects for inflation remain more mixed, with European Central Bank economists still providing massive stimulus to the economy. Its president Mario Draghi has insisted the bank’s policy will remain accommodative until it sees a sustained pick-up in inflation towards its two per cent target.
While reducing unemployment should theoretically lead to inflationary wage increases, signs of a move towards two per cent have been slow to come. Core inflation, which strips out the effects of volatile food and energy prices, rose to 1.2 per cent in July, up from 1.1 per cent in June.