Eurozone Unemployment Rate Near 5-Year Low

03:27, 1st July 2016

(RTTNews) - The Eurozone unemployment rate reached its lowest since July 2011, mirroring strong labor market situation ahead of "Brexit".

Final Purchasing Managers' survey released showed that the recovery in the euro area manufacturing sector gathered momentum in June, but highlighted a wide performance disparity between Germany and France.

Data from Eurostat published on Friday showed that the jobless rate fell to 10.1 percent in May, as expected, from 10.2 percent in April. The figure was the lowest rate registered since July 2011.

The final manufacturing Purchasing Managers' Index rose more-than-initially estimated to 52.8 in June from 51.5 in May. This was the fastest growth in six months. The flash score was 52.6.

The survey was conducted prior to the announcement of referendum, so any Brexit impact is yet to be seen in the report, Chris Williamson, chief economist at Markit, said.

The survey showed that the growth rate of manufacturing employment accelerated to the quickest during the current 22-month sequence of expansion in June.

Official data revealed that the number of unemployed persons decreased by 112,000 from the previous month. Compared with May 2015, unemployment fell by 1.440 million.

IHS Global Insight economist Howard Archer said a decent drop of 112,000 in unemployment in May was supportive to hopes that consumer spending can hold up over the coming months and help limit the potential hit to Eurozone growth coming from the "Brexit".

Given that at least some euro-zone firms will probably delay hiring after the fallout of the UK's vote to leave the EU, there is a strong chance that the labor market recovery will slow, Stephen Brown, an economist at Capital Economics, said.

The youth unemployment rate, which applies to those below 25, was 20.7 percent in May compared to 20.9 percent in April and 22.4 percent in the same period of last year.

In Germany, the unemployment rate was stable at 6.1 percent in June, the lowest since reunification in 1990.

Italy's jobless rate fell to 11.5 percent in May from 11.6 percent in the previous month. But the youth unemployment rate held steady at an elevated 36.9 percent in May.

The overall unemployment rate in the EU28 came in at 8.6 percent in May, slightly down from 8.7 percent in April and from 9.6 percent in May 2015.