-Howard Archer from IHS Economics
After four consecutive months in the red, the Euro bloc's consumer inflation recorded zero growth in April, adding to signs that deflationary fears have been easing. In the previous month cost of living dropped 0.1%. Despite the positive development, the headline inflation has remained in what the European Central Bank calls the 'danger zone', below 1% for 19 consecutive months. Core inflation, which excludes food and energy components, climbed 0.6% in April, compared to the same pace of growth seen in the preceding month. A separate report showed jobless rate in the Euro bloc climbed to 11.3% in March, whereas economists had expected a decline to 11.2%. However, the German labour market continued to improve, as the number of unemployed fell for the seventh straight month. Destatis said the number of people out of a job declined by a seasonally adjusted 8,000 in April. While the reading was worse than the expected decline by 14,000, the adjusted unemployment rate remained at 6.4%, the lowest level on record. Meanwhile, the Euro zone's fourth largest economy, Spain, grew more than expected in the first quarter of 2015. The nation's economic output rose 0.9%, being equal to a 2.6% annual growth, that is 18 times as fast as the US GDP growth in the beginning of the year. The country is quickly becoming the Euro bloc's star performer, with inflation falling less than expected. Spain's CPI slid 0.6% versus the estimated 0.7% decline.
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