By Ed Frankl
The eurozone’s unemployment rate held steady at a record low in May, a reflection of a persistently tight labor market and a signal that European Central Bank policymakers might need to act further to curb economic activity as they try to lower inflation.
The bloc’s unemployment rate was 6.5% in the month, matching the level of April, according to data from the European Union’s statistics agency Eurostat released Friday.
The May reading was the same as expectations from economists polled by The Wall Street Journal. The rate has been steadily falling since it reached 8.6% in August 2020, at the height of the pandemic.
The number of unemployed people in the eurozone in May fell 57,000 compared with April to 11.01 million, Eurostat said. Youth unemployment rate was stable at 13.9% in May.
Across the euro area, the labor market remains tight. Seasonally adjusted unemployment levels held steady in Germany, and France, at 2.9% and 7.0% respectively, while it fell by 0.2 percentage points in Italy to 7.6% and rose by 0.1 points to 12.7% in Spain, Eurostat said.
But there are signals that the labor market could be loosening. Germany earlier Friday reported that its adjusted unemployment figure–based on national standards–rose unexpectedly to 5.7% from 5.6%. This could ease the pressure on the European Central Bank, which sees a cooling labor market as a sign that its interest-rate hikes could be helping curtail economic activity in its efforts to lower inflation.
Write to Ed Frankl at [email protected]
