Euro Area Unemployment Steady at 12.1 percent as Retail Sales Soar
Euro area unemployment held steady at 12.1 percent in November, as retail sales expanded at a faster pace than forecast leading up to the holiday season.
The currency region’s unemployment situation was relatively unchanged in November, as northern and southern member-states continued to pace in the opposite direction. Based on estimates provided by the European Commission, the lowest unemployment levels were recorded in Austria (4.8 percent), Germany (5.2 percent) and Luxembourg (6.1 percent). The member-states with the highest jobless rates were Greece (27.4 percent in September 2013) and Spain (26.7 percent).
Despite the lack of progress made on the employment front, retail sales expanded at the fastest pace in 12 years, official data showed, Used as a proxy for household demand, retail sales are a key indicator of consumer spending. Retail sales soared 1.4 percent in November and at an annual rate of 1.6 percent, easing concerns the European Central Bank could adopt more drastic measures to avoid deflation.
Non-food products expanded at the fastest rate, gaining 1.9 percent over the previous month. Food, drinks and tobacco sales increased 1.1 percent.
“Today’s [Eurozone] data releases provide some ammunition for the hawks on the ECB’s governing council in making the case against further easing measures at tomorrow’s ECB policy meeting,” said Martin van Vliet of ING Bank.
While no changes to monetary policy are expected Thursday, the ECB will probably react to deflationary pressures persisting in the Eurozone economy. Consumer inflation eased to 0.8 percent in December, prompting speculation the central bank could introduce new easing measures to combat deflation. ECB President Mario Draghi is expected to keep the door open to further easing measures at tomorrow’s press statement.
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