Unemployment in the Eurozone was at 12.1 per cent in May, slightly up from 12.0 per cent in April – but lower than expectations of 12.3 per cent. Youth unemployment (under 25s) was slightly down from 23.9 per cent to 23.8 per cent. In the EU27, meanwhile, the unemployment rate was 10.9 per cent and youth unemployment 23.0 per cent.
In both zones, rates are up markedly year-on-year, from 11.3 per cent in the Eurozone and 10.4 per cent in the EU27. Eurostat estimates that a respective 19.222m and 26.404m were unemployed in the areas.
Among member states, the lowest unemployment rates were in Austria (4.7 per cent), Germany (5.3 per cent) and Luxembourg (5.7 per cent), while the highest were in Spain (26.9 per cent) and Greece (26.8 per cent in March).
Commenting on the unemployment and inflation data, chief European economist at Capital Economics Jonathan Loynes said:
The latest euro-zone inflation and labour market figures inject a slight note of caution after the recent improvement in some of the region’s activity indicators. Admittedly, June’s rise in inflation from 1.4 per cent to 1.6 per cent was driven entirely by energy base effects. Core inflation – which is now included in the flash release – remained very subdued at just 1.2 per cent and core goods inflation slipped to just 0.7 per cent. Headline inflation should therefore fall further over the coming months, but this is a reflection of economic weakness and won’t necessarily prompt cautious consumers to up their spending.
Meanwhile, May’s euro-zone unemployment rate of 12.1 per cent was lower than expected, thanks to some downward revisions to previous months’ rates. But unemployment still rose by a monthly 67,000 and the big story remains the huge divergence between unemployment rates across countries, which undermines suggestions that imbalances within the currency union are narrowing. Overall, then, there is nothing here to suggest that the euro-zone economy does not need additional policy support, though the ECB looks unlikely to oblige this week.