The number of people out of work fell a surprisingly large 213,000 in July to reduce the unemployment rate by 0.2 percentage points to 10.9 percent, its lowest reading since February 2012.
For once, the headline drop was not largely attributable to the strength of the German labour market as the unemployment rate there held steady at 4.7 percent (albeit still the lowest in the region). Rather, in addition to a suspiciously steep 0.5 percentage point decline to 12.0 percent in Italy, there were tidy falls amongst a number of the smaller member states. Hence, Croatia (15.1 percent after 15.4 percent), Malta (5.1 percent after 5.3 percent) and Portugal (12.1 percent after 12.3 percent) all recorded significant falls. Elsewhere amongst the larger economies performances were mixed with a 0.2 percentage point decline in Spain (to 22.2 percent) contrasting with a 0.1 percentage point increase in France (to 10.4 percent).
However, there was also good news on youth joblessness where the overall rate declined from a lower revised 22.5 percent in June to 22.3 percent.
In the aggregate the July figures offer some hope that the Eurozone economy may be performing a little better than suggested by some of the other recent indicators.
The unemployment rate measures the number of unemployed as a percentage of the labor force.
Unemployment data are closely monitored by the financial markets. These data give a comprehensive report on the state of the economy and its future direction. A rising unemployment rate can be a warning sign of hard times while a low rate can be a warning of inflation as wages are bid up to attract labor.
Unemployment data are expressed in both a numerical value and as a percentage of the labor force. Generally, the definition of those unemployed follows that of the International Labour Organisation (ILO). It states that an unemployed person is one between the ages of 15 to 74 years of age who was not employed during the reference week, had actively sought work during the past four weeks and was ready to begin working immediately or within two weeks. The unemployment rate is the percentage of unemployed persons over the total number of active persons in the labor market. Active persons are those who are either employed or unemployed.
Eurostat provides an unemployment rate for each EU country as well as for the EMU and EU as a whole. It should be noted that the unemployment rate for a country will frequently differ with that reported by the national statistics agency. That is because of the varying interpretations of the ILO definition by member states and Eurostat.
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