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Eurozone unemployment hits record low a week before ECB rate decision

A man holds a European Union flag as he walks outside the European Commission building during Europe Day celebrations in Brussels on May 4, 2024.
A man holds a European Union flag as he walks outside the European Commission building during Europe Day celebrations in Brussels on May 4, 2024. Copyright Virginia Mayo/Copyright 2024 The AP. All rights reserved.
Copyright Virginia Mayo/Copyright 2024 The AP. All rights reserved.
By Indrabati Lahiri
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Falling unemployment could point to a brightening European outlook, with the Euro Area economic sentiment improving as well.

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The Eurozone unemployment report for April 2024, which was released today, shows that it hit at a new record low of 6.4%, beating analyst estimates of 6.5%, according to Eurostat. This was a decrease from March’s number, which was 6.5% as well. Unemployment in the euro area has remained stagnant at 6.5% for the five months up to March.

The number of people without a job fell by 100,000 from the previous month to 10.998 million. The unemployment rate for people under the age of 25 also dropped to 14.1% in April. This was down from 14.3% in the month prior.

Spain still topped the unemployment rate list, at 11.7%, with France coming in second place with 7.3% of the population without jobs. Italy had an unemployment rate of 6.9%. On the other hand. Germany had the lowest unemployment rate, coming in at 3.2%.

The percentage of women without jobs in the EU in April 2024 was 6.3%, which was a slight decrease from 6.4% in March’. On the other hand, the percentage of jobless men in April stayed the same as March at 5.7%.

In the euro area, the percentage of women without jobs was 6.7%, a fall from 6.9% in March, whereas for men, it was 6.1%, which was the same as March.

The Czech National Bank said in a report, “The recent decline in the unemployment rate to its current historical lows in the euro area is mainly due to a significant improvement in the situation in Greece and, in particular, in Spain, with its large population.

“Ten years ago, unemployment stood at more than 25% in both these countries. Since then, however, unemployment in these countries has been steadily and significantly declining (except for a small break at the beginning of the COVID pandemic).”

Could falling unemployment point to a brighter European outlook?

This improving unemployment figure could be good news for Europe, which has been struggling with higher inflation and interest rates, as well as economic and geopolitical uncertainty from the ongoing Russia-Ukraine war and the resulting rising energy prices.

In May, the Euro Area’s economic sentiment increased to 96 points, which was the most in the last four months, according to the European Commission. This was a smidge above April’s 95.6, however, still missed analyst expectations of 96.2.

Service providers’ sentiment rose to 6.5 in May from 6.1 in April, boosted by their expectations of future demand. Industrials’ sentiment also rose slightly to -9.9 this month, from -10.4, in the previous month. Consumers were also less downbeat, with sentiment coming in at -14.3 in May from -14.7 in the previous month.

Economic sentiment amongst retailers stayed the same at -6.8, whereas for constructors, it dropped to -6, from -5.6.

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