LONDON - Glimmers of hope emerged Wednesday for the eurozone economy to suggest that the coming year will see the recovery gathering steam.
Official figures showed a stabilization
in unemployment and the biggest increase in monthly retail sales in 12 years.
Eurostat, the EU's statistics office,
said the eurozone's unemployment rate held steady in November at a record 12.1
percent for the eighth month running after a modest 4,000 rise in the ranks of
the jobless to 19.24 million. Since September's 12.2 percent rate was revised
down, 12.1 percent is now the record.
The agency also said retail sales
during the month spiked by 1.4 percent, way ahead of predictions in the markets
for a more modest increase of around 0.3 percent. The rise was the biggest
since November 2011.
Though much of the increase was due to
a 2.1 percent rise in France, where consumers may have brought forward
purchases ahead of a sales tax rise, analysts said the figures suggest
households are increasingly confident that the financial crisis is past its
worst and that the recovery has legs.
The increase followed two monthly
declines and was fairly broad-based across the eurozone. The Iberian economies
of Spain and Portugal did particularly well, posting gains of 1.9 percent and
3.1 percent, respectively.
"The outlook is starting to
brighten a little for eurozone consumers," said James Howat, European
economist at Capital Economics.
Despite the signs of improvement, the
eurozone continues to face huge problems and most economists think it will
remain the laggard of the world economy.
Among the challenges will be to get
unemployment down and prevent deflation, a sustained fall in prices that can
encourage consumers to put off purchases in the hope of getting better bargains
further down the line.
Wednesday's figures highlighted
disparities across the eurozone, which had 17 members in November -- the bloc
grew to 18 members following Latvia's adoption of Europe's single currency at
the start of the year.
While countries like Germany and
Austria have unemployment rates around 5 percent, those at the forefront of
Europe's debt crisis, such as Greece and Spain, have over one in four of their
people out of work.
The situation among the young there is
even worse, though Greece appears to be showing some improvement on that front,
with 54.8 percent of those aged 15-24 out of work at last count in September,
compared with 57.7 percent the previous month.
Policymakers are hoping the eurozone's
return to economic growth may get unemployment down. So far, the eurozone's
recovery from its longest-ever -- though not deepest -- recession has been paltry
but most economists are predicting a modest pick up this year, with even Greece
emerging from a six-year depression that has seen its overall economic output
shrink by over a fifth.
Because it takes a few months for
changes in economic growth to affect the labor market, and as many governments
continue to make spending cuts to get public finances into shape, most
economists think it will be some time before there's a real drop in
"It is good news that labor
shedding has receded so that the number of unemployed is no longer rising, or
at least not by much," said Marie Diron, a senior economist adviser at EY,
formerly Ernst & Young. "But we think that it will be a long while
before we see a fall in unemployment."