Business Financials

Eurozone unemployment falls to near 8-year low

Eurozone unemployment falls to near 8-year low

Unemployment in the eurozone fell in February to its lowest level since May 2009 as a hiring spree took hold despite uncertainty over Brexit, EU figures showed Monday.

The Eurostat statistics agency said the jobless rate in the 19-nation single currency area fell to 9.5 percent, with sustained drops in Spain and Portugal also a factor.

During the worst of the debt crisis that ravaged mainly the southern countries in the eurozone, unemployment peaked at 12.1 percent.

In total, the number of eurozone unemployed has come down by almost four million from a peak of 19.3 million in April 2013.

Data firm Markit meanwhile reported that factory orders in the eurozone were fueling the recovery in jobs.

In its closely watched survey, Markit said the eurozone manufacturing PMI hit 56.2 points in March, up from 55.4 in February, the fastest growth in six years.

“The upturn is broad-based with one exception. Greece is suffering an increased rate of contraction of its manufacturing economy, with exports dropping sharply again in March,” said Chris Williamson of IHS Markit.

The PMI measures companies’ readiness to spend on their business and so gives a good idea of how the underlying economy is performing.

Any reading above the boom-bust 50 points line indicates the economy is expanding.

The series of fresh data will add to a list of arguments from powerhouse Germany that the European Central Bank should stop its massive stimulus programme as early as possible.

The ECB, led by its chief Mario Draghi, is at pains to stress that despite the series of positive economic signals, it may be too soon to pull back on the programme.

Eurostat on Friday gave ammunition to Draghi’s side of the argument to maintain the stimulus, reporting that inflation had dropped to 1.5 percent, well below the ECB’s target.

By country in February, Europe’s top economy Germany had the lowest eurozone jobless rate at 3.9 percent, while Greece at 23.1 percent was the worst.

France, the second biggest economy in the eurozone, remained stuck at 10 percent.

Spain continued its steady drop, landing at 18.0 percent. While still high, this was a big drop from 20.5 percent 12 months before.

This means “that more than 500,000 fewer people are unemployed than a year ago in the eurozone’s fourth largest economy,” said Bert Colijn, Senior Economist at ING bank.

Across the European Union’s 28 member states, the unemployment rate stood at 8.0 percent in February. This was the lowest since January 2009.

“Job growth could accelerate in the months ahead, as hiring expectations among businesses have increased significantly in recent months and economic growth has been robust for a while now,” Colijn said.

–AFP