The eurozone’s unemployment rate continued its slow fall in February, a support to economic growth in the currency area as weaker demand for its exports threatens to slow a modest recovery.
The European Union’s statistics agency said Monday that the rate of unemployment across the 19 countries that use the euro fell to 10.3% in February from 10.4% in January, hitting its lowest level since August 2011. The January figure was revised higher from 10.3%.
That reflected a 39,000 decline in the number of people without jobs to 16.63 million.
Despite a steady drop in the jobless rate since it peaked at more than 12% in early 2013, the jobs market remains very weak by international standards. In February, the U.S. boasted an unemployment rate of just 4.9%.
With more people in work, consumer spending should help underpin growing domestic demand, which was the main driver of the recovery in 2015.
However, any pickup in consumer spending is unlikely to be strong enough to quickly push the annual rate of inflation toward the European Central Bank’s target of just under 2%.
In a separate release, Eurostat said prices of goods leaving the eurozone’s factory gates fell 0.7% in February from January, and were down 4.2% from February 2015. That was the largest year-to-year decline since November 2009. While much of the drop was due to lower energy charges, prices for other goods fell by 0.2% on the month, and 0.8% on the year.
The ECB in March announced a package of new measures aimed at fueling price growth and encouraging bank lending in an effort to bring inflation back to target. It cut all its interest rates, decided to start purchasing some corporate bonds, increased its monthly asset purchase total and launched a second round of loans to banks designed to encourage these to lend to the private sector. Yet the central bank said it still expects inflation this year to be only 0.1%.
The ECB isn’t alone among central banks in facing subdued inflation. Tumbling commodity prices and patchy growth are weighing on price pressures across the global economy.