World Economy

Lowest Eurozone Joblessness Since Early 2012

Lowest Eurozone Joblessness Since Early 2012Lowest Eurozone Joblessness Since Early 2012

Unemployment in the euro area unexpectedly declined to its lowest level in more than 3 years, signaling the region’s recovery is gaining pace even as dark clouds from China draw on the horizon, Bloomberg reported.

The seasonally adjusted unemployment rate for the 19-nation region dropped to 10.9% in July from 11.1% in June, the European Union’s statistics office in Luxembourg said on Tuesday. That’s the lowest since February 2012 and below the median forecast of 11.1% in a Bloomberg survey of economists.

The data comes before European Central Bank policy makers meet in Frankfurt on Thursday to assess their current stimulus. While the drop in unemployment adds to signs that the euro area is on the mend, China’s economic slowdown and downside risks to inflation due to a slump in the oil price may damp the outlook.

“The ECB is really getting mixed messages -- growth is holding up quite well, the recovery story looks to be on track,” said Nick Kounis, head of macroeconomic research at ABN Amro Bank NV in Amsterdam. “However, we’ve had an increase in market turmoil, which has led to some tightening in financial conditions, and we’ve seen the slump in commodity prices that have caused a decline in inflation expectations.”

With joblessness still high, particularly in southern Europe, and hindering a pickup in momentum, ECB President Mario Draghi has consistently urged the region’s leaders to improve the competitiveness of their economies, saying the central bank’s bond-buying program can’t serve as a substitute for much-needed structural reforms.