Euro Area: Unemployment rate drops in August

Euro Area Unemployment August 2021

Euro Area: Unemployment rate drops in August

Labor market conditions in the common currency block improved in August. The number of unemployed people decreased by 261,000, with the unemployment rate falling to 7.5% in August from 7.6% in July.

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, 11 economies saw their unemployment rate decrease in August, including Spain. On the other hand, two economies saw their unemployment rate increase. Meanwhile, six economies saw a stable unemployment rate, including France, Germany and Italy.

Disparities in the labor market among core and periphery countries persist. Spain (14.0%) and Greece (13.2%) are the economies with the highest unemployment rates. At the other end of the spectrum, Malta (3.2%), the Netherlands (3.2%) and Germany (3.6%) have the lowest unemployment rates.

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

“Furlough schemes are coming to an end in the coming months for many countries, or will persist in a reduced form. This means that some delayed restructuring among businesses could cause the rapid labour market recovery to pause or temporarily reverse a bit. Still, with unemployment this low and hiring expectations still strong, we don’t expect a strong effect from furlough schemes ending at this point.”

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