RTTN:Eurozone Jobless Rate At New High; Inflation Falls
The euro area unemployment rate reached a fresh high in October as unfolding severe austerity forced both governments and companies to shed jobs.
Providing some relief for consumers amid recession, inflation slowed more-than-expected to a two-year low in November.
The jobless rate rose marginally to 11.7 percent, in line with expectations, from 11.6 percent in September, data from Eurostat showed Friday.
Eurozone labour markets remain under serious pressure from ongoing weakened economic activity and generally low business confidence, said IHS Global Insight's chief UK economist Howard Archer.
The number of unemployed increased by 173,000 from the previous month to 18.703 million. Compared with October 2011, unemployment rose by 2.174 million.
There are notable differences between unemployment among member countries. The lowest jobless rate was reported in Austria, while Spain has the highest rate of 26.2 percent, followed by Greece.
The unemployment rate for males increased to 11.6 percent from 10.3 percent last year. The female jobless rate rose to 11.8 percent from 10.7 percent.
According to the flash estimate, inflation fell to 2.2 percent from 2.5 percent in October. The faster-than-expected slowdown reflects sharp slowdown in energy costs and in turn raises hopes that inflation will fall to the central bank's target range.
The final data is due on December 14. The November inflation was the lowest since December 2010.
An interest rate cut at the ECB's December 6 policy meeting is a real possibility, IHS Global Insight's Archer said. The ECB will have the new Eurozone GDP and consumer price inflation forecasts available at its December meeting, and the growth forecasts in particular will likely justify a trimming of interest rates.
The euro area shrank 0.1 percent in the third quarter and dropped 0.2 percent in the second quarter. The economy thus entered a technical recession.
The Organization for Economic Co-operation and Development this week said the euro area will remain in recession until early 2013, leading to a mild contraction in GDP of 0.1 percent next year, before growth picks up to 1.3 percent in 2014.
