Eurozone unemployment falls to decade low in shock boost for embattled bloc

Unemployment in the eurozone has dropped below eight per cent for the first time in a decade in a surprising boost for the embattled single currency bloc.

The number of people unemployed fell by 90,000, with the rate dropping to 7.9 per cent in November from eight per cent in October, the EU’s statistical office Eurostat said – the lowest level since October 2008.

It comes after economic sentiment in the euro area deteriorated sharply in December as weaker-than-expected data continued to weigh down the economy.

Fears of a recession in Germany have also mounted after the country reported poor industrial activity in November.

Today’s unemployment figures varied sharply among member states, with Germany’s unemployment rate as low as 3.3 per cent, Italy’s at 10.5 per cent and Spain’s as high as 14.7 per cent.

“After a few months of stagnation in the job market, this is a relief as it indicates that uncertainty about the economic outlook and a slowing pace of growth has not caused employment growth to grind to a halt just yet,” ING economist Bert Colijn said.

“With unemployment under eight per cent, it is likely that wage growth will continue to pick up – while this is positive from the perspective of consumers, it is looking to be increasingly problematic for businesses,” he added.

The Czech Republic had the lowest rate at 1.9 per cent, while in Greece 18.6 per cent were without a job.

The EU unemployment remained at 6.7 per cent – the lowest since monthly records began in 2000.

CEBR senior economist Marina Mensah-Afoakwah said that while the figures would undoubtedly boost the bloc, the year ahead may be trickier, predicting growth to slow. 

She said: “It is impossible to ignore that fears of recession in Germany and global economic pressures continue to weigh down economic sentiment in the currency bloc and could put a strain on the Eurozone’s labour market in the year ahead.”