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Euro zone jobless up, inflation at decade low
Fri, 27th Feb 2009 10:19
BRUSSELS, Feb 27 (Reuters) - The euro zone's unemployment rate crept up more than expected in January while inflation was confirmed at its lowest in almost 10 years, data showed on Friday, in another sign of deep recession.
The jobless rate in the 16-nation currency area increased to 8.2 percent from an upwardly revised 8.1 percent in December, hitting a 28-month high, EU statistics office Eurostat said.
Economists polled by Reuters had expected the rate at 8.1 percent. A year ago, before the financial crisis began to harm the real economy the unemployment rate was at 7.3 percent.
Eurostat also confirmed that euro zone inflation plunged in January 1.1 percent from 1.6 percent in December and 2.1 percent in November. The monthly inflation rate was -0.8 percent as expected.
Both the unemployment and inflation figures are expected to boost expectations that the European Central Bank will cut its interest rate in March, after it eased borrowing costs by a total of 225 basis points since October to 2.0 percent.
The ECB wants to keep inflation below, but close to, 2 percent.
Eurostat said that the annual inflation figure was dragged down by a 5.3 percent fall in energy prices. Among other falls, prices of transport declined 3.2 percent, communications 1.9 percent and clothes 0.6 percent.
Economists say the euro zone economy is sinking deeper into its first ever recession, worsened by a global credit crunch which has slashed financing to companies and households, choking demand and prompting corporate belt-tightening.
Eurostat estimated some 13.036 million people were without jobs in the euro zone in January, 256,000 more than a year ago.
The highest jobless rate was in Spain, 14.8 percent, while the lowest in the Netherlands at 2.8 percent.
(Writing by Marcin Grajewski, editing by Mark John))
Keywords: EUROZONE/INFLATION UNEMPLOYMENT
(Brussels newsroom, tel +32-2-287-6830, fax +32-2-230-5573, e-mail: brussels.newsroom@reuters.com)
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Copyright Thomson Reuters 2009. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The jobless rate in the 16-nation currency area increased to 8.2 percent from an upwardly revised 8.1 percent in December, hitting a 28-month high, EU statistics office Eurostat said.
Economists polled by Reuters had expected the rate at 8.1 percent. A year ago, before the financial crisis began to harm the real economy the unemployment rate was at 7.3 percent.
Eurostat also confirmed that euro zone inflation plunged in January 1.1 percent from 1.6 percent in December and 2.1 percent in November. The monthly inflation rate was -0.8 percent as expected.
Both the unemployment and inflation figures are expected to boost expectations that the European Central Bank will cut its interest rate in March, after it eased borrowing costs by a total of 225 basis points since October to 2.0 percent.
The ECB wants to keep inflation below, but close to, 2 percent.
Eurostat said that the annual inflation figure was dragged down by a 5.3 percent fall in energy prices. Among other falls, prices of transport declined 3.2 percent, communications 1.9 percent and clothes 0.6 percent.
Economists say the euro zone economy is sinking deeper into its first ever recession, worsened by a global credit crunch which has slashed financing to companies and households, choking demand and prompting corporate belt-tightening.
Eurostat estimated some 13.036 million people were without jobs in the euro zone in January, 256,000 more than a year ago.
The highest jobless rate was in Spain, 14.8 percent, while the lowest in the Netherlands at 2.8 percent.
(Writing by Marcin Grajewski, editing by Mark John))
(Brussels newsroom, tel +32-2-287-6830, fax +32-2-230-5573, e-mail: brussels.newsroom@reuters.com)
COPYRIGHT
Copyright Thomson Reuters 2009. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
