Euro zone inflation remains weak, unemployment stubbornly high

The threat of deflation intensifies, as the Euro zone's inflation rate declined to 0.3% in November, down from 0.4% a month earlier. Eurostat said that consumer prices were dragged down by sharp declines of energy costs as a result of dramatic falls in oil markets. Consumer inflation has not been at the ECB's inflation goal of close to 2% since the beginning of 2013, and has been sliding since late 2011 when it reached 3%. Stripping out volatile components such as energy, food, alcohol and tobacco prices, inflation remained steady at 0.7%.  Everything below the 1% threshold is considered by the ECB as the "danger zone", and the central bank may be forced to deploy more radical measures to combat deflation. 

Meanwhile, the jobless rate in the 18-nation bloc remained stubbornly high at 11.5% for the third consecutive month in October. Eurostat's report showed that the number of people out of work rose by 60,000 to 18.395 million during the month under review. The highest jobless rate was recorded in Greece, where the reading stood at 25.9%. A separate report showed retail sales in Germany rose on both monthly and annual basis. Retail turnover increased 1.9% on month in October following a 2.8% decline in the previous month. A sharp increase in private consumption helped boost Germany's economic activity in the third quarter.