Eurozone unemployment rate below 10% for first time in 7 years

Posted on December 1, 2016

It has taken seven years marked by financial crisis, sluggish growth and bouts of recession — but the eurozone’s unemployment rate has finally returned to single-digit levels.

Underlining the region’s fragile return to economic health, Eurostat, the European Commission’s statistics bureau, said unemployment in October had fallen to 9.8 per cent. Eurostat also improved the figure for September from 10 per cent to 9.9 per cent.

Unemployment has been one of the most stubborn economic problems for the single currency area as it has recovered from the deep financial crisis of 2008-09. At more than 12 per cent during the worst years of the region’s sovereign debt crisis, joblessness in the eurozone was much higher than in the US and the UK. Unemployment and growth rates improved much more quickly in the US and Britain, while the eurozone also has a higher rate of structural joblessness, with a greater proportion of workers permanently out of work.

The size of the region’s economy only surpassed its pre-crisis peak this year — much later than the US and Britain.

“Improving labour markets are key if eurozone consumers are to make a solid contribution to growth over the coming months, especially as gradually rising inflation is likely to eat into purchasing power,” said Howard Archer, economist at IHS Markit, a consultancy.

The overall fall in eurozone joblessness masks starkly differences between the bloc’s most prosperous and poorest members. In Germany, the eurozone’s economic powerhouse, unemployment is at its lowest level since the unification of the country’s east and west, recorded by Eurostat at 4.1 per cent.

In Greece and Spain, the unemployment rates — while also falling — remain high at 23.4 per cent and 19.2 per cent respectively.

Unemployment for people under 25 remains more than double the overall rate, with one in five of those seeking work unable to find it across the eurozone. Youth unemployment remains at more than 40 per cent in Greece and Spain and stood at 36.4 per cent in Italy, Eurostat said.

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