Eurozone: Unemployment rate inches down in October

Conditions in the labor market in the Eurozone improved slightly in October, according to recently released data by Eurostat. The number of unemployed persons fell by 178,000, which followed September’s fall of 114,000. The unemployment rate fell from September’s 9.9% to 9.8% in October, which represents the lowest rate since July 2009. September’s unemployment rate had been revised down from a previously reported 10.0%.

Looking at the countries in the region, the unemployment rate fell in 16 of the countries observed, reaching multi-year lows in Belgium, Finland, Germany, Ireland, Portugal, Slovakia, Slovenia and Spain. Greece (data refer to August) and Malta were the only countries to see an increase in the unemployment rate, while dynamics were stable in the remaining economies. Despite the broad-based gains, notable divergences persist in the labor market among core Eurozone countries and those on the periphery. Greece is the economy in the Eurozone with by far the highest unemployment rate (23.4%, data refer to August), followed by Spain (19.2%) and Cyprus (12.0%).

At the other end of the spectrum, Germany (4.1%), Malta (4.9%) and the Netherlands (5.6%) registered the lowest unemployment rates in the Eurozone in October. Among the remaining major economies, Italy had the highest unemployment rate with 11.6%, followed by France with 9.7%.

In 2015 as a whole, unemployment in the Eurozone averaged 10.9%, which is the lowest average rate since 2012. FocusEconomics Consensus Forecast panelists expect the unemployment rate to average 10.1% in 2016, which is unchanged from last month’s forecast. For 2017, the panel expects the unemployment rate to average 9.7%, which is also unchanged from last month’s projection.