Euro zone unemployment at lowest rate in over four years

Spain and Greece fall outside the overall positive trend

Unemployment across the 19-country euro zone has fallen to its lowest rate in a little more than four years, official figures showed in the latest sign that the economic recovery in the region ended 2015 on a relatively cheerful note.

Following surveys this week that suggested the euro zone economy is poised for solid growth in 2016, statistics agency Eurostat found that the unemployment rate in the region fell to 10.5 per cent in November from 10.6 per cent the previous month.

The rate has not been lower since October 2011, when the euro zone was mired in a debt crisis that raised questions over the future of the single currency bloc.

Perhaps most encouragingly, the statistics agency found that the number of unemployed fell by 130,000 people during the month. That took the total down to 16.9 million people in a population of around 330 million. It is the first time since November 2011 that unemployment in the euro zone has been below 17 million.

Though the unemployment numbers are encouraging, big disparities remain across the region with many countries, such as Spain and Greece, still lumbered with jobless rates above 20 per cent.

In contrast, Germany’s unemployment rate was just 4.5 per cent in November. The differences among the bloc’s young workers are even more dramatic. Again in Spain and Greece, the rate of unemployment among those aged 15 to 24 is almost 50 per cent. The Republic had an unemploymemt rate of 9.8 per cent in December.

Though the overall figures suggest that the economic recovery from recession, which had lasted for more than two years, is paying some dividends in the labour market, there is little evidence that the region is poised for a turbo-charged lift-off. Anxiety is growing over trouble in the global economy, particularly in China, where financial markets are extremely volatile.

Separate figures from Eurostat showing that retail sales fell in November for the third straight month show that the recovery is patchy. In November, retail sales declined 0.3 per cent.

Subdued consumer spending over the past few months has come as somewhat of a surprise to many economists as a number of factors should be supportive. These include the sharp fall in fuel prices at the pump in the wake of the slide in oil prices, as well as super-low inflation.

A December survey from the European Commission suggested there was unlikely to have been much of an improvement in the crucial period around Christmas. Though the European Commission’s economic sentiment indicator struck a four-year high, retail sector confidence eased slightly, possibly in light of the Paris terrorist attacks on November 13th that saw 130 people killed.

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