Eurozone jobless rate is rare bright spot for bloc

THE unemployment rate in the eurozone held steady in January at 7.8pc, down from 8.6pc a year earlier and sticking to the lowest rate since October 2008.

The lowest rates of unemployment were in the Czech Republic at 2.1pc and Germany at 3.2pc, while the highest rates were Greece at 18.5pc, Spain at 14.1pc and Italy at 10.5pc. Ireland has record numbers of people in work and an unemployment rate of 5.3pc, roughly in the middle of the pack.

Unemployment here fell by 15,200 in the final quarter of 2018, the 26th quarter in succession where it has declined on an annual basis. At the same time, the buoyant economy has drawn in workers and there are 375,000 non-Irish nationals working here.

There are however 12.85 million people without jobs in the bloc, and of these 2.4 million were under 25. Economies in countries like Italy are still smaller than they were before the financial crisis hit and more than a third of people aged under 25 are unemployed there and in Spain and Greece. Ireland has issues with high levels of youth unemployment, but at 12pc it is a fraction of the laggards.

Since the low point for the number of people in work in the eurozone after the financial crisis, there have been 10.87 million jobs created in the bloc and it took until last year to recover to pre-crisis levels of employment. By contrast, the United States had recovered all of the jobs lost in the crash by May 2014.

The fact that there are more people in work should help the ailing European economy, which has been hit by a combination of austerity and now a slowing of export markets for the likes of Germany and recent retail and service economy data has offset some of the gloom in manufacturing.

Separately, a rise in energy and food, alcohol and tobacco prices pushed the headline rate of inflation slightly higher to 1.5pc in February.

The European Central Bank, which holds a policy meeting next week, has been trying to push inflation up to 2pc, but the gauge that it looks at, which strips out volatile items like food and energy, was even weaker at just 1pc. The slow pace of the European recovery means that the ECB will not raise interest rates this year as planned, with some economists now pencilling in 2021 for its first hike, although even that may be in peril if the bloc enters a recession.

The central banks in the rich world that did manage to raise interest rates have now put those increases on hold as the global economy has started to falter. The St Louis Federal Reserve, one of the regional banks that form part of the Federal Reserve said its measure of economic uncertainty is at its highest since its inception in 1986, due to Brexit, the European slowdown, and US-China trade wars.