Eurozone retail sales rebound, unemployment holds at record high

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Eurozone retail sales rebound, unemployment holds at record high

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Retail sales in the eurozone leapt in November hinting at a pick up in consumer demand.

The rebound was the biggest monthly increase in 12 years .

However the recovery has yet to affect the labour market. Unemployment in the region remaining at a record high in November .. at 12.1 percent of the workforce for eighth month in row.

Demand that has been weakened across the bloc by high rates of unemployment.

Month-on-month sales rose 1.4 percent, compared with falls of 0.6 percent and 0.4 percent in September and October.

Year-on-year retail sales were up 1.6 percent in the eurozone.

They rose strongly in the bloc’s two largest economies, Germany and France, by 1.5 and 2.1 percent respectively.

ECB ponders deflation danger

On Tuesday we learned of a surprise drop in eurozone inflation to 0.8 percent in December, well below the European Central Bank’s target of just under 2.0 percent.

It was the third straight month in which the reading was below 1.0 percent, a level the ECB, which holds its monthly monetary policy meeting on Thursday, considers a danger zone for deflation.

“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 ING Bank economist Martin van Vliet.

But he added: “With a sustainable recovery not yet assured – this is still very much a jobless recovery – ECB President Draghi, in his press statement, will likely keep the door to further easing wide open.”

Jobless totals still not falling

The number of people out of work in the eurozone was 19.241 million, 4,000 more than in the previous month, the European Union’s statistics office Eurostat said.

Unemployment was lowest in Austria, at 4.8 percent, and Germany, at 5.2 percent, while the highest rates of joblessness were in Greece, at 27.4 percent, and Spain at 26.7 percent.

The number of people out of work in Europe has been rising since 2011. The European Commission said on Wednesday that in addition to national reforms, the 28-nation EU had to integrate further economically, fiscally and politically to address the problem.

“Without these further steps uncertainty could return sooner than we think and today’s recovery could quickly dissipate,” European Commissioner for Employment, Social Affairs and Inclusion László Andor wrote in a comment on the data.