Eurozone Unemployment Rate Continues To Fall

The euro area unemployment rate continued to fall in October with the gradual relaxation of restrictions related to Covid-19, data from Eurostat revealed on Wednesday.

The jobless rate fell marginally to 8.4 percent in October from 8.5 percent in the previous month. The rate came in line with economists' expectations.

Data showed that unemployment in the currency bloc decreased by 86,000 from the previous month. However, on a yearly basis, unemployment was up by 1.692 million.

Meanwhile, the youth unemployment rate rose to 18.0 percent in October from 17.9 percent a month ago.

There was a sharp increase in the number of people claiming unemployment benefits after the Covid-19 outbreak.

A significant part of those who had registered in unemployment agencies were no longer actively looking for a job or no longer available for work, leading to discrepancies in the number of registered unemployed.

Only unemployed people without a job who have been actively seeking work in the last four weeks and are available to start work within the next two weeks are counted as unemployed.

The unemployment rate points to a very mild labor market impact from the crisis so far, which brings upside risk to the GDP outlook for next year, Bert Colijn, an ING economist said.

The economist said the unemployment rate remains a crucial unknown in the outlook for 2021. While the harm done so far seems to be incredibly mild given the scale of the crisis, short-time work schemes still mask some of the harsh labour market realities. Therefore, it seems unlikely that Eurozone unemployment will hit double-digits with the start of the recovery around the corner thanks to the quick progress made on vaccines, Colijn added.

In the EU27, the overall jobless rate held steady at seasonally adjusted 7.6 percent in October.