Unemployment in the euro area remained unchanged in June, raising hopes that the economy is emerging from the long recession. According to the European statistics office, the jobless rate in the 17 nations that use the euro held at 12.1 per cent. This means the unemployment rate remained at the record high seen in May, after this was revised down to that figure from an initially reported 12.2 per cent.
Separately, euro area inflation also held steady at 1.6 per cent in July after accelerating for two months. On another very positive note, euro area manufacturing rose faster than initially estimated in July as the manufacturing sector started to grow again after two years of contraction.
Meanwhile, Germany’s unemployment rate held near a 20-year low while the number of people out of work fell by a seasonally adjusted 7,000 to 2.93 million in July.
According to the Federal Labour Agency, the adjusted jobless rate was unchanged at 6.8 per cent. The unemployment data could potentially buoy support for the government before the September elections, as Chancellor Angela Merkel seeks a third mandate as German leader on September 22. In June, seasonally adjusted retail sales in Germany fell 1.5 per cent from May, when they rose 0.7 per cent.
Economists polled by Bloomberg News predicted an increase of 0.2 per cent. On the other hand, sales fell 2.8 per cent from a year earlier.
Finally, in the UK, manufacturing growth accelerated more than forecast in July, adding to evidence that Britain’s recovery is gathering steam. This supports the case for the Bank of England to keep the stimulus on hold.
The measure of factory output rose to 54.6 in July from 52.9 in June. This is the highest in 28 months. Figures above 50 indicate expansion.
This report is the most encouraging sign yet that the industrial sector’s recovery is gathering momentum. The recovery looks all the more impressive given that demand is still being held back by weak eurozone demand.
Separately, the Bank of England left its bond-buying programme on hold.
This article was compiled by Bank of Valletta for general information purposes only.