LONDON (AP) — Unemployment across the 19-country eurozone fell in December for the 15th month running to its lowest level in a little more than four years, official figures showed Tuesday.
However, the monthly decline was the smallest in six months and has reinforced concerns that the recovery was already losing momentum at the end of 2015 — even before the China-related turmoil in financial markets stoked fears for the global economic outlook.
Statistics agency Eurostat said the number of people out of work across the eurozone in December decreased by 49,000 to a total of 16.75 million, its lowest level since October 2011. The last time the eurozone has enjoyed a longer run of falling unemployment was the 21-month stretch that ended in June 2007.
As a result of the latest monthly fall, the unemployment rate fell from 10.5 percent to 10.4 percent, its lowest since September 2011.
Though unemployment has been falling steadily, it's still relatively high across the region, certainly in comparison with the United States, where the jobless rate stands at 5 percent.
And the overall numbers continue to mask big disparities. While Germany's unemployment rate stands at 4.5 percent, according to Eurostat, Greece and Spain remain lumbered by jobless rates above 20 percent. And youth unemployment is way too high at 22 percent across the eurozone as a whole.
A further note of caution comes from the fact that the monthly decline was the smallest since June and may add to concerns over the economy. On Monday, European Central Bank President Mario Draghi said the "downside risks" facing the European economy have increased recently, a comment that's reinforced speculation that the bank is preparing to unveil further stimulus measures at its next policy meeting in March.
Getting unemployment down is not the direct motivation behind the ECB's stimulus program, which involves super-low and even negative interest rates and large-scale bond purchases. The ECB's main aim is to get consumer price inflation back toward the target of just below 2 percent by shoring up economic activity. In the year to January, inflation stood at a paltry 0.4 percent.
Separate figures from Eurostat showed just how muted price pressures are in the eurozone. Producer prices, which measure the cost of goods and materials for companies, were down 0.8 percent in December, way more than the 0.2 percent drop recorded in the previous month.
The fall showcases the effect of big declines in oil and commodity costs. Analysts said the subdued inflation environment among firms is likely to be replicated in consumer prices over the coming months, making it more likely that the ECB provides more stimulus on March 10.
"In all, the latest data support our view that the ECB has a lot more work to do if it is to stand any chance of hitting its consumer price inflation target in the medium term," said Jennifer McKeown, senior European economist at Capital Economics.
Analysts think the ECB could add to its 60 billion euros ($65 billion) in monthly bond purchases through at least March 2017, a step which pumps newly printed money into the economy. It could also cut the rate on the deposits it takes from commercial banks from its current rate of minus 0.3 percent. The negative rate is aimed at pushing banks to lend money rather than hoarding it.