Eurozone jobless rate climbed to a new record in April after six quarters of economic contraction forced companies to scale back investment and in turn employment.
Giving room for more monetary policy manoeuvre, inflation accelerated in May, but stayed well within the target of 'below but close to 2 percent'. The increase in inflation from a 38-month low has eased fears of deflation.
The seasonally adjusted unemployment rate rose to 12.2 percent in April from 12.1 percent a month ago, according to the latest figures published by Eurostat on Friday. The outcome matched economists' forecast.
According to Eurostat estimates, 19.37 million people in euro area were unemployed in April. This was 95,000 higher than in March and exceeded previous years' level by 1.64 million.
Youth unemployment worsened again in April with 3.624 million persons aged below 25 left with no job. The number of unemployed youth was 188,000 higher than in April 2012. The youth unemployment rate was 24.4 percent in the euro area in April compared with 22.6 percent in April 2012.
The total jobless rate in EU 27 remained unchanged at 11 percent in April. There were 26.58 million unemployed.
Among the EU member states, the highest unemployment rate was in Greece with 27 percent in February. It was followed by Spain and Portugal. The lowest rates were observed in Austria, Germany and Luxembourg.
European Council President Herman Van Rompuy last week said youth unemployment is one of the most challenging issue in EU countries.
This week, the Paris-based Organization for Economic Co-operation and Development downgraded euro area outlook citing lingering effects of the debt crisis, the ongoing drag from fiscal consolidation and weaknesses in credit markets.
OECD forecast the region to contract 0.6 percent in 2013, before rebounding next year, with GDP rising 1.1 percent. It urged the European Central Bank to do more even as the interest rate remains at a record low.
Preliminary data showed today showed inflation rising for the first time since August last year. Inflation rose to 1.4 percent from April's 38-month low of 1.2 percent, in line with economists' expectations. Eurostat is set to release full inflation data on June 14.
Core inflation that excludes energy, food, alcohol and tobacco also increased in May, rising to 1.2 percent from 1 percent in April.
Among components, food, alcohol and tobacco registered the biggest increase in May, up 3.3 percent, the agency said. Meanwhile, energy prices declined for a second straight month, down 0.2 percent.
James Howat at Capital Economics does not expect any significant announcements at the ECB's meeting next week. Rather, the economist expects the bank to impose negative deposit rates in the third quarter, prompted by a deepening euro-zone crisis.
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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.