The unemployment rate in the eurozone reached a new low in May and June, highlighting the tightness of the labor market and suggesting that higher wages may contribute to sustained inflation in the bloc.
According to data released by Eurostat, the European Union’s statistics agency, the jobless rate remained at 6.4% in June, matching the downwardly revised figure from May. Economists had expected a slightly higher rate of 6.5%. This latest reading represents a fresh low in the unemployment rate for the 20-member bloc, which has consistently decreased since the peak of 8.6% in August 2020, during the height of the COVID-19 pandemic.
Between May and June, the number of unemployed people in the eurozone decreased by 62,000, according to Eurostat. Meanwhile, youth unemployment remained at 13.8% in the bloc, with a slight decrease in absolute numbers compared to the previous month.
Overall, the labor market across the eurozone continues to favor workers, with only Greece and Spain maintaining double-digit unemployment rates in June.
In Germany, the powerhouse of the eurozone, the jobless rate declined once again in July following a slight increase in the previous month, according to figures released by a government agency on Tuesday.
The consistently low levels of unemployment in the eurozone present a challenge for policymakers, as economists attribute wage growth in a tight labor market as a key driver of high inflation.
Despite repeated interest rate hikes by the European Central Bank to curb inflation, the core inflation rate, which excludes energy and food prices, remained unchanged at 5.5% in July compared to the previous month, according to preliminary data released this week.
