Prices in the eurozone fell by 0.2 per cent in December after rising by 0.3 per cent in November. The fall was driven mainly by lower energy costs due to the plummeting price of oil.

The tip into deflation adds pressure on the European Central Bank (ECB) to take further action to stimulate the economy of the 19-nation currency block. It is the first time the eurozone has experienced deflation since the depths of the financial crisis in 2009.

In the meantime, in a third round of voting on December 29, the Greek Parliament failed once again to approve the Prime Minister’s choice of President, triggering a snap election for early 2015. The election could bring the left-wing Syriza party to power, jeopardising Greece’s participation in the international bail­out programme and derailing the reforms brought about by the current administration. Syriza has pledged to renegotiate the terms of the country’s €240 billion bailout. The final vote was regarded as a major setback for the Prime Minister, as well as for eurozone countries that work­ed hard to bring Greece back from the brink of bankruptcy in 2010.

Finally, private sector employment in the US increased by more than expected in December, according to a report published by payroll processor ADP. The report shows that the private sector added 241,000 jobs in December following an upwardly revised increase of 227,000 jobs in November. This increase was the biggest since June and followed a 227,000 gain in November.

Economists surveyed by Bloom­berg News had expected private sector employment to increase by about 225,000 jobs compared to the addition of 208,000 jobs originally reported for the previous month.

The report continues to paint a rosy picture of the US economy and indicates that the job market was sustaining strength as 2014 drew to a close.

This article was compiled by Bank of Valletta plc for general information purposes only.