Eurozone unemployment rose to a record high and inflation accelerated more than expected, suggesting that household spending will remain muted going forward and weigh further on economic activity.
According to Eurostat data, the seasonally adjusted jobless rate remained unchanged at a record 11.3 percent in July, in line with forecast. The June rate was revised up from 11.2 percent.
About 18 million people were out of work in July, the highest on record. The number of persons unemployed increased by 88,000 from June and by 2.051 million from the previous year.
The unemployment rate for EU27 nations was 10.4 percent in July, also stable with June.
Data showed wide divergence between core and the peripheral nations. The lowest unemployment rates were reported by Austria, the Netherlands, Germany and Luxembourg. Meanwhile, Spain continues to register the highest rate of 25.1 percent, followed by Greece.
Flash estimate from Eurostat showed today that inflation accelerated more than expected in August to 2.6 percent from 2.4 percent in July. The rate was forecast to rise to 2.5 percent.
The central bank aims to retain inflation rates below, but close to 2 percent over the medium term. The final report for August is due on September 14.
The increase in inflation is probably due to the rise in oil prices and to a lesser extent higher food prices over the summer months, said ING Bank NV's Peter Vanden Houte.
The Survey of Professional Forecasters this month projected inflation to slow to 1.7 percent in 2013 from 2.3 percent this year. And the economy is estimated to shrink 0.3 percent in 2012.
As inflationary pressures are set to ease over the remainder of the year, the European Central Bank is likely to step up measures to support the economy. The ECB is widely expected to outline bond purchase programme when it meets next on September 6.
by RTT Staff Writer
For comments and feedback: email@example.com