Eurozone inflation remained unchanged in February, lowering the pressure on the central bank to take action at the policy meeting next week to overcome fears of deflation.
Unemployment in the region held steady at an elevated level in January, despite economic recovery taking hold, official data revealed Friday.
Inflation came in at 0.8 percent for the third consecutive month in February, flash estimate from Eurostat showed. Inflation did not ease to 0.7 percent as expected by economists.
The figure has been staying below the European Central Bank's target of 'below, but close to 2 percent' for the thirteenth consecutive month.
The weakness in energy prices was the major component that take inflation to lower levels. Excluding energy, food, alcohol and tobacco, core inflation rose to 1 percent from 0.8 percent a month ago.
Stable consumer inflation and rising core inflation slightly eases pressure on the ECB to take further stimulative action as soon as its March policy meeting, IHS Global Insight's Chief European Economist Howard Archer said.
Much will likely depend on whether the ECB staff's new forecasts show Eurozone consumer price inflation still below 2 percent in 2016, Archer added. If the ECB does act, it will most likely be in the form of measures aimed at adding liquidity.
Nonetheless, Jonathan Loynes, chief European economist at Capital Economics expects either a small interest rate cut or possibly even some form of quantitative easing next week.
After the G20 meeting in Sydney last weekend, ECB President Mario Draghi said the bank is ready to act if the outlook for prices deteriorates, although he sees no fear of deflation in the euro area.
People are not postponing their expenditure with a view to buy the same thing at lower prices, Draghi said. The ECB will have the full set of information needed to decide whether to act or not by its next rate-setting meeting on March 6.
The European Commission this week lowered its euro area inflation projection for this year to 1 percent from 1.5 percent. The forecast for 2015 was trimmed to 1.3 percent from 1.4 percent.
Data today showed that energy prices declined deeply by 2.2 percent annually, while the cost of non-energy industrial goods and services rose 0.6 percent and 1.3 percent, respectively. More detailed version of prices will be released on February 24.
The euro area unemployment rate was 12 percent in January, another data from the statistical office of the European Union showed.
The rate was at 12 percent since October and matched economists' expectations. The youth unemployment rate also held steady at 24 percent in January.
In January, 19.17 million people were unemployed in the euro area. The number of people out of work increased 17,000 from December, while it fell 67,000 from January 2013.
Among the member states, the lowest unemployment rates were recorded in Austria, Germany and Luxembourg. The highest rate was reported in Greece, at 28 percent in November.
Data published by Italy's statistical office today showed that the Italian unemployment rate hit a new record high in January. The rate rose to 12.9 percent in January, the highest since 1977, from 12.7 percent in December.
French unemployment reached a record 3.32 million in January, according to a report from the Labor Ministry this week.
The Eurozone jobs problem is far from over as unemployment remains damagingly high and it seems unlikely to come down markedly for some time to come, IHS Global Insight's Archer said.
The EU cut the euro area jobless rate forecast for this year to 12 percent from 12.2 percent seen in November. Likewise, the outlook for 2015 was lowered to 11.7 percent from 11.8 percent.
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