Euro Area: Unemployment rate dips in October

Euro Area Unemployment October 2020

Euro Area: Unemployment rate dips in October

Labor market conditions in the common currency block improved in October. The number of unemployed people decreased by 86,000, while the unemployment rate dropped to 8.4% in October from 8.5% in September.

That said, short-time work schemes involving a considerable portion of the labor force across the Eurozone has prevented a jump in the unemployment.

Looking at the countries with available data, eight economies saw their unemployment rate increase in October, including France and Spain. Meanwhile, four countries saw their unemployment rate falling, including Italy. The rest saw a stable unemployment rate.

Disparities in the labor market among core and periphery countries persist. Greece is the economy in the Eurozone with the highest unemployment rate (16.8%, data refers to August), closely followed by Spain (16.2%). At the other end of the spectrum, Malta (3.9%), the Netherlands (4.3%) and Germany (4.5%) have the lowest unemployment rates.

Commenting on the release, Bert Colijn, senior economist at ING, stated:

“The unemployment rate remains a crucial unknown in the outlook for 2021. While the harm done so far seems to be incredibly mild given the scale of the crisis, short-time work schemes still mask some of the harsh labour market realities. Therefore, it seems unlikely that eurozone unemployment will hit double-digits with the start of the recovery around the corner thanks to the quick progress made on vaccines. That brings some upside risk to the economic recovery for 2021 for the job market.”

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