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Eurozone Unemployment Improves Slightly

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Eurozone Unemployment Improves Slightly

Eurostat has just published European Unemployment figures for the month of March. The rate in the Eurozone has fallen very slightly to 11.8%, this is in line with the previous month’s figures which have just been revised down from 11.9% to 11.8%. The consensus estimates for the Zones unemployment rate was 11.9%.
There are now approximately 18.9 million people out of work across the Eurozone which has unemployment rates ranging from 4.9% in Austria to over 25% in Spain.

Divergence in unemployment levels throughout the 18 individual nations is highly significant. No other fundamental economic indicator is showing the levels of disparities that are being seen in the unemployment data.

Today’s numbers show a largely insignificant improvement of just over 20k additional jobs being created in the month of March, the trend however is in the right direction, albeit frustratingly slow. Despite the clear evidence of economic recovery taking hold in the Eurozone there is a large lag impacting on any employment pickup. Should the recovery continue at it’s current pace then unemployment will naturally continue to fall and in the process close the disparity gaps between the member nations.

The European Central Bank (ECB) has promised to embark on Quantitative Easing if this is required. The trigger for this, as stated by the Bank, would be a further fall in the inflation rate. The ECB has been very reluctant to introduce further monetary stimulus into the bloc preferring to take a wait and see approach based on the Bank’s projections of an imminent improvement in the rate of price growth. The ECB is under a lot of pressure from many quarters to take action sooner rather than later on the inflation situation. The lack of improvement in the unemployment situation can only serve to increase the urgency on Europe’s monetary authority to react with a stimulus programme.

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