Eurozone unemployment falls to near 9-year low

LONDON (AP) — Unemployment across the 19-country eurozone fell in November to its lowest level in nearly nine years, official figures showed Tuesday, in the latest sign that the currency bloc's economy picked up further momentum at the end of 2017.

Eurostat, the European Union's statistics agency, said the jobless rate adjusted for seasonal factors fell to 8.7 percent in November from 8.8 percent the previous month. That's the lowest rate since January 2009, when the eurozone was reeling from a deep recession following the global financial crisis.

The agency said the number of unemployed fell by 107,000 during the month, taking the total down to 14.26 million.

Unemployment across the region has been falling steadily over the past year as the eurozone recovery has gathered steam — figures later this month are expected to show that economic growth picked up in the fourth quarter, possibly to an impressive 0.8 percent.

Though the unemployment rate has been on a downward trend in the eurozone, it remains more than double the U.S. rate of 4.1 percent. That's largely due to the fact that the recovery since the Great Recession has been far slower in the eurozone because the region also endured a debt crisis that led to many countries, notably Greece, enacting huge budget cuts.

The legacy of the debt crisis endures in the divergent unemployment rates across the bloc. Many countries, such as Germany, are enjoying low unemployment rates below 5 percent, while those who were at the forefront of the debt crisis still have double-digit rates of unemployment.

Still, even there, there are signs of improvement. Spain's jobless rate, which in recent years stood at around 25 percent, is now down to 16.7 percent, while Greece's has been steadily falling, though still high just above 20 percent.

The hope among policymakers across the region is that the decline in unemployment will start to lift wages and boost spending, making the recovery self-sustaining and normalizing the eurozone economy following years of crisis.

So far, there's been little evidence that the steady fall in unemployment is doing much to lift average pay rises in the eurozone.

However, there are signs from company surveys that falling unemployment could soon start to work its way through into higher wages, which should help inflation get to the European Central Bank's target rate of just below 2 percent — inflation has been stubbornly below target for years and currently stands at 1.4 percent.

How quickly wages pick up is likely to determine when the ECB ends its massive bond-buying stimulus program, which is currently set to last at least through September.

"With the percentage of companies mentioning the scarcity of labor as a factor limiting production now at the highest level since the start of the monetary union (in 1999), wage growth should start to pick up," said Peter Vanden Houte, an economist at ING.