Europe’s jobless rate lowest since 2008 amid recovery

FRANKFURT — Unemployment in the 19 countries that use the euro fell to its lowest level in nearly a decade as the region’s economy benefits from waning worries over the currency union’s problems with too much debt.

The European Union’s statistics agency Eurostat said Wednesday that the jobless rate fell to 8.5 per cent in February from 8.6 per cent the month before.

The proportion out of work is the lowest since December 2008, shortly after the bankruptcy of U.S. investment bank Lehman Brothers plunged the word into a financial crisis and many parts of the global economy, including the eurozone, into deep recessions.

The fall in the rate came as number of jobless fell by 141,000 to below 14 million.

While the economy is growing solidly, expanding by a decade-high rate of 2.5 per cent in 2017, inflation remains benign. Consumer prices rose 1.4 per cent in the year to March, up from 1.1 per cent the month before, but below the European Central Bank’s goal of just under 2 per cent.

Perhaps of concern to policymakers at the European Central Bank, Eurostat found that core inflation, which excludes volatile food and fuel prices, remained stubbornly low at 1.0 per cent. That suggests that underlying inflation pressures emanating from such things as wage increases remain muted.

The ECB has used monthly bond purchases pumped newly printed money into the economy since March 2015 in an effort to get inflation toward its goal but prices have been slow to respond.

The central bank for the eurozone says the purchases will continue at the pace of 30 billion euros ($37 billion) per month at least through September. Analysts think the bank will then halt or phase out the purchases over ensuing months

The headline inflation figure was also boosted by a calendar effect, since Easter fell in March this year. That likely led to an acceleration of inflation in some items, such as air fares and package vacations.