Euro Area: Unemployment rate dips in April
Labor market conditions in the common currency block improved in April. The number of unemployed people decreased by 134,000, while the unemployment rate dipped to 8.0% in April from 8.1% in March.
That said, short-time work schemes involving a considerable portion of the labor force across the Eurozone have prevented a jump in the unemployment rate.
Looking at countries with available data, six economies saw their unemployment rate decrease in April, including France and Germany. On the flip side, six countries saw their unemployment rate increase, including Italy and Spain. Meanwhile, six countries saw a stable unemployment rate.
Disparities in the labor market among core and periphery countries persist. Greece is the economy with the highest unemployment rate (15.8%, data refers to January), followed by Spain (15.4%). At the other end of the spectrum, the Netherlands (3.4%), Malta (3.8%) and Germany (4.4%) have the lowest unemployment rates.
Commenting on the release, Bert Colijn, Eurozone senior economist at ING, stated:
“The labour market continues to improve as economies lift restrictions. With furlough schemes still in place across the eurozone, this is resulting in a very low unemployment rate given the GDP shock of last year, and this helps the prospects of a swift economic rebound. With incomes largely retained in the eurozone and savings rates surging over the lockdown periods, consumers stand ready to recover some pent-up demand. That will boost the GDP recovery and add to inflationary pressures, but the big question remains what happens when furlough schemes end. A strong economic recovery will limit delayed layoffs, but we do expect restructurings to occur, causing a more muted labour market recovery once support schemes end.”