Eurozone: Eurozone unemployment rate falls in December

Conditions in the labor market in the common currency bloc improved in December, according to data by Eurostat. The number of unemployed persons fell by 121,000, which was a significantly larger decrease than November’s fall of 74,000. The unemployment rate inched down to 9.6% from November’s 9.7%, the lowest rate since May 2009.

Looking at the countries in the region, eight economies saw lower unemployment rates in December, including Portugal and Spain. In contrast, unemployment rose in five economies, including France, while the labor market was stable in the remaining countries. 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 (23.0%, data refer to October), followed by Spain (18.4%) and Cyprus (14.3%).

At the other end of the spectrum, Germany (3.9%), Malta (4.5%) and the Netherlands (5.4%) registered the lowest unemployment rates in the Eurozone in December. Among the remaining major economies, Italy had the highest unemployment rate with 12.0%, followed by France with 9.6%.

In 2016 as a whole, unemployment in the Eurozone averaged 10.0%, which is the lowest average rate since 2009. FocusEconomics Consensus Forecast panelists expect the unemployment rate to average 9.7% in 2017, which is unchanged from last month’s forecast. For 2018, the panel expects the unemployment rate to average 9.3%.