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Eurozone unemployment still 10.1% in July, inflation disappoints in August at 0.2%

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Eurozone unemployment still 10.1% in July, inflation disappoints in August at 0.2%

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Unemployment in the eurozone was unchanged in July at 10.1 percent of the workforce – the lowest in five years.

Youth unemployment throughout the 19 countries that use the euro was 21.1 percent, but it was almost 44 percent in Spain.

The number of young people out of work in Greece was over 50 percent in May, the most recent month for which figures were available.

Malta, the Czech Republic and Germany recorded the lowest jobless rates.

Greece had the highest – 23.5 percent – followed by Spain at 19.6 percent.

The rate for the entire European Union was also unchanged at 8.6 percent, the lowest in more than seven years. Youth unemployment in the EU was 18.8 percent.

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Italian fall not a positive

Italy’s unemployment rate fell unexpectedly in July to 11.4 percent from 11.6 percent the month before, national statistics bureau ISTAT reported on Wednesday.

That was less positive than the headline figure suggests as some 63,000 jobs were lost.

The jobless rate – which measures those looking for work – only fell because people unable to find jobs stopped searching altogether and left the labour market, not because employment levels rose.

In July the politically sensitive youth unemployment rate, measuring job-seekers between 15 and 24 years old, jumped to 39.2 percent from 37.3 percent to post its highest level since August last year.

Prime Minister Matteo Renzi’s labour market reforms introduced last year eased firing restrictions in large firms and offering temporary fiscal incentives for employers who offer workers permanent contracts rather than temporary ones. Those incentives are being gradually phased out this year.

Inflation still a worry for ECB

Inflation figures for the eurozone were also released on Wednesday.

They were stable in August at 0.2 percent, the same as July.

The decline in the cost of energy was not as steep as a month earlier, but price rises of food, industrial goods and services slowed.

The inflation rate remains far below the European Central Bank’s around two percent target, which it has missed for three years.

The fact that it is not rising is bad news for the ECB’s policymakers who are using stimulus measures – record-low interest rates and bond-buying programmes – to try to prevent a deflationary spiral.

They are due to meet next on September 8th, although most investor do not expect changes in policy until the final three months of the year.

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