Euro zone unemployment holds steady at 11.7%

Updated: Friday, 01 Feb 2013 10:10

Europe received a welcome dose of good news today with the news that both unemployment and inflation across the 17 European Union countries that use the euro are lower than anticipated.

Eurostat, the EU's statistics office, said unemployment in the euro zone held steady at 11.7% in December.

Since November's rate was revised down from 11.8% to 11.7%, December's equates to a new joint-record.

But the figures are slightly better than anticipated, with many fearing the rate would rise to 11.9% as the euro zone remains stuck in a recession.

Greece has the highest jobless rate in the euro zone, leapfrogging Spain. At the end of October, Greece's unemployment rate was 26.8% compared to Spain's 26.1%. Greece's statistics are compiled on a different timeframe.

As with the overall picture, Greece now has the highest level of youth unemployment in the euro zone. In October a staggering 57.6% of under 25's were out of work, just ahead of Spain's 55.6% rate for December.

The jobless figures do not make for completely grim reading throughout the euro zone. Austria had the lowest unemployment rate in the euro zone in December at 4.3%, while Germany's was a relatively-low 5.3%.

Unemployment across the broader 27 country EU also remained steady at 10.7%. This, according to Eurostat, compares with 7.8% in the US and around 4% in Japan.

Separately, Eurostat reported that inflation in the euro zone fell to 2% in the year to January, down from 2.2% the previous month. The decline was unexpected and means that prices are rising more or less in line with the European Central Bank's mandate of "close to, but below 2%."

The figures may prompt speculation that the ECB could cut borrowing costs further at its next rate-setting meeting on Thursday. Currently, its benchmark rate is at its record low of 0.75% and many economists argue that it should be cut further to help stimulate the ailing economy of the euro zone.