CHART OF THE WEEK
Eurozone unemployment is falling and stood at 8.7% last November. This is a record low since 2009, flirting with the 2000–09 average. The 1.1 percentage point fall year-on-year is the fastest in twenty years. At this rate, the eurozone’s unemployment rate could reach the previous cycle’s low point (7.3% at the start of 2008) in 2019.
OUR ANALYSIS
This shift encapsulates quite different pictures for individual member states. The good news is that unemployment is falling across the eurozone, including in places like Italy where it seemed stubbornly high. Germany, where the unemployment rate is at its lowest since the start of the eighties, only accounts for a 0.1 percentage point of the overall 1.1 point fall.
The countries worst-hit by the eurozone crisis are experiencing rapid falls in unemployment, although current levels remain higher than the averages seen before the 2008–09 financial crisis. All being well, Ireland and Portugal will soon have wiped out the impact of the 2008–09 and 2011–13 recessions, but Cyprus, Spain and especially Greece will need several more years to reach that stage.
The opinion expressed above is dated 18 January 2018 and is liable to change.
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