-Howard Archer, economist from IHS
Inflation in the currency bloc rebounded somewhat in February from the recent six-year low, moving closer to positive territory. Nevertheless, the indicator has remained in red for the third consecutive month. Prices in 19 member states of the Euro zone were 0.3% lower than in the previous year in February, following a dramatic 0.6% fall in January. Analysts, however, had called for a 0.5% decline. The main driver behind the negative inflation in the Euro bloc was the fall in oil prices. The core measure of inflation, which irons out volatile components such as food and energy, stayed unchanged at 0.6%. The European Central Bank aims to keep inflation just under 2% over the medium term, and the threat of sustained deflation forced the central bank to deploy a massive 1.1 trillion euros quantitative easing programme of government-bond buying.
Meanwhile, the unemployment rate in the Euro zone edged down again in January. According to Eurostat, the Euro zone jobless rate dropped to 11.2% in the reported month, marking a year that the unemployment rate stayed below 12% level. Considerable improvement has been reported in Germany, where the labour market continued to strengthen as the number of unemployed people fell for the fifth straight month in February. The jobless rate in the country was at 6.5%, the lowest since records began.
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