Eurozone unemployment falls

Daniel Roland/AFP/Getty Images

BRUSSELSThe number of jobless in Europe fell slightly in July and business optimism rose, according to official data released Friday, adding to the tentative signs that the region's economy is staging a modest comeback.

Europe's statistics office said Friday the number of unemployed in the eurozone was down by 15,000 to 19.23 million, marking the second consecutive fall since April 2011. The jobless rate remained at a record of high of 12.1 percent.

Meanwhile, an index of European business sentiment rose again on the month while the monthly inflation rate for the 17 nations using the euro decreased.

"The recent improvements are minimal, and the situation is still very fragile," said European Union Employment Commissioner Laszlo Andor.

"This is no time for celebration or complacency."

The economy of the 17 EU nations that use the euro had been stuck in an 18-month recession to the first quarter of this year as a debt crisis prompted many countries to pursue tough austerity policies that weighed on growth and confidence. The eurozone finally moved out of recession in the second quarter of this year, showing a 0.3 percent increase in annual economic output.

In a further upbeat signal for the region's economy, an index tracking economic sentiment increased by 2.7 points to 95.2 in the eurozone and by 3.1 points to 98.1 in the wider EU, marking the fourth consecutive monthly increase in both areas, while reaching a two-year high in the EU.

Commerzbank analysts said the index's higher-than-expected increase points to a likely growth rate of 0.5 percent for the third quarter in the eurozone, after a 0.3 percent rise in the April to June period.

The monthly unemployment rate again varied widely between some of the bloc's leading economies such as Germany or Austria, with 5.3 percent and 4.8 percent respectively, and crisis-hit southern European nations such as Spain and Greece, where more than one in four people were unemployed.

Analysts said the eurozone seasonally adjusted unemployment figures came as another indicator that the bloc has left the recession behind, even if growth remains meager.

"Stable unemployment in the eurozone is relatively good news," said Marie Diron of Ernst & Young, while warning that job growth will be slow.

"Governments are still trying to find ways to save on wage bills while companies have yet to return productivity and profitability trends to pre-crisis rates," she said.

The unemployment rate for the 28-nation EU held steady at 11 percent as the number of jobless fell 33,000 to 7.42 million, Eurostat said. On the year, EU unemployment was up from 10.5 percent while the eurozone rate was up from 11.5 percent.

EU youth unemployment in July remained high with a total of 5.56 million under 25 registered as unemployed, even though it dipped slightly from 23.5 to 23.4 percent on the month. For the Eurozone, it rose by 0.1 point to 24 percent for the eurozone.

Separately, the eurozone annual inflation is expected to be 1.3 percent in August, down from 1.6 percent in July, according to a Eurostat estimate. That is far below the European Central Bank's 2 percent price stability ceiling, leaving further room for loose monetary policies.