Unemployment in the euro area increased further in May and reached a new record high, signaling that the ongoing downturn in business activity continues to weigh on the labor market despite signs of improvement in the general economy.
Separate data showed that inflation in the currency bloc increased for the second straight month in June, after falling to a three-year low in the beginning of the second quarter. However, inflation stayed below the target set by the European Central Bank, which is widely expected to keep the policy rate unchanged at Thursday's meeting.
The unemployment rate increased to 12.1 percent in May from a downwardly revised 12 percent in April, statistical office Eurostat said Monday. Economists had forecast the rate to rise 12.3 percent from April's initially estimated 12.2 percent, which was a record high.
The unemployment figure for March also underwent revision, from the original 12.1 percent to 12 percent.
The jobless rate among youth, aged between 15 and 24, was 23.8 percent in May, compared to 23.9 percent in April and 23 percent in May last year.
Last month, European leaders clinched a deal on combating youth unemployment, which has soared to alarming levels in many EU member nations, and agreed to set aside more money to tackle the situation.
It was decided to speed up programs like the Youth Employment Initiative, with spending concentrated in the first two years. The meeting also decided to allocate EUR 8 billion for this program, higher than the originally planned EUR 6 billion.
There were around 19.22 million unemployed persons in the euro area in May, which was 67,000 more than a month earlier, and 1.344 million more than in May 2012, the Eurostat report showed.
Among the member states, the lowest unemployment rates were recorded in Austria, Germany and Luxembourg, and the highest in Spain and Greece. Year-on-year, the unemployment rate increased in seventeen member states and fell in ten.
Highlighting the weakness of the region's employment market, final data from a survey compiled by Markit Economics today showed that employment in Eurozone's manufacturing sector fell for the seventeenth month running in June, but the rate of job losses eased from the previous month.
The survey showed that the region's manufacturing activity decreased further during the month, though at a slower rate as new business intakes decreased further, leading to a further decrease in production.
Separately, Eurostat today revealed that euro area inflation accelerated for the second straight month in June, owing mainly to a spike in energy prices.
Inflation as per the harmonized index of consumer prices rose to 1.6 percent from 1.4 percent in May and 1.2 percent in April, which was the lowest figure in thirty-eight months. Inflation, however, remained well below the ECB's target of close to, but not above, 2 percent.
Driving the acceleration, energy prices advanced 1.6 percent annually in June, reversing the previous month's 0.2 percent decrease.
Meanwhile, core inflation that excludes prices of energy, food, alcohol and tobacco held steady at 1.2 percent in June. The ECB targets inflation 'below, but close to 2 percent'.
Nevertheless, survey data released by the European commission last week showed that economic confidence in the euro area strengthened more-than-expected to a 13-month high in June, driven by an improvement in sentiment among consumers and managers in the major business sectors, signaling that the currency bloc's recovery from the longest-ever recession is gathering momentum.
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May 22, 2026 14:46 ET Minutes of the latest Fed policy session was the highlight of the week along with survey data on the U.S. housing market. In Europe, survey data signaled the trends in the euro area private sector. Further, consumer price inflation data from the U.K. was in focus. In Asia, various economic indicators from China drew attention to the health of the economy.