- Howard Archer from IHS Economics
The Euro zone jobless rate declined in September to the lowest level since January 2012. According to Eurostat, the unemployment rate dropped to 10.8% last month, compared with a revised 10.9% in August and better than economists' expectations of 11.0%. Despite the fall to multi-year low, jobless in the currency bloc is a problem, as it still remains well above the 7.5% level seen prior to the global financial crisis. In Germany, the Euro bloc's number one economy, the unemployment rate was unchanged at 6.4% in October, while the participation rate rose.
At the same time, consumer prices in the 19-country bloc posted a zero growth in the twelve months through October, following the 0.1% decline in the previous month, when the gauge slid below zero for the first time since March. Core inflation, which excludes volatile items such as food, tobacco, alcohol and energy, climbed 1.0% on an annual basis in October, compared with the 0.9% growth recorded in the preceding month. As inflation in the Euro zone has stubbornly stuck below the ECB's target level of 2%, the central bank may expand or alter stimulus programme to support the region's economy and underpin consumer prices. On top of that, the ECB may also cut deposit rate.
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