The euro zone unemployment rate remained at a record low for the fifth consecutive month in March, with unemployment declining, but the tight labor market has pushed the European Central Bank to We may continue to be cautious.
The seasonally adjusted unemployment rate in March was 6.5%, Eurostat data showed on Friday, the same level as the previous four months. This interest rate was in line with economists' expectations. A year ago, the unemployment rate was 6.6%.
The EU unemployment rate fell to 6.0% from 6.1% in February. This rate was at the same level as the same month last year.
The number of unemployed people in the euro area decreased by 94,000 from the previous month to 11,087,000. The number of unemployed people in the EU fell by 74,000 to 13,258,000.
The youth unemployment rate in the euro area, which applies to people under 25, was 14.1%, down from 14.4% in the previous month. The corresponding figure for the EU fell from 14.7% to 14.6%.
The number of unemployed young people in the euro area has fallen by 30,000.
Spain had the highest unemployment rate among EU member states at 11.7%. The Czech Republic and Poland recorded the lowest rates at 2.9%.
ING economist Peter Vanden Hout said: “The stagnation of the working-age population and the slowdown in the economic recovery have prevented a significant rise in unemployment, but a slight slowdown in labor demand will have an impact on future wage agreements.'' “There is a possibility that it will give.''
Policymakers, including ECB President Christine Lagarde, had raised concerns about wage inflation earlier this year as the negotiated settlement was likely to lead to significant wage increases amid high living costs.
Rate setters will have a clearer picture of the macroeconomic outlook in June, when ECB staff publish their latest forecasts.
Official data released earlier this week showed the eurozone economy grew by 0.3% in the first quarter, emerging from recession.
The ECB is widely expected to cut interest rates in June, and recent comments from policymakers support that expectation.
“The question is what happens after June,” ING's Vanden Hout said.
“If the economic recovery continues, the labor market could tighten again and the downward trend in wage growth could be reversed, which is good reason for the ECB to proceed cautiously with the interest rate normalization process.”
Written by Jyotsna V
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