2022.05.0313:05:00UTC+00Eurozone Jobless Rate Hits Record Low; PPI Inflation At Historic High

Euro area unemployment rate dropped to a record low in March as firms raised hiring even as the war in Ukraine and record high inflation damped demand and production, data published by Eurostat revealed on Tuesday.

Higher prices for energy and intermediate goods pushed up factory gate inflation to another historic high in March, another report from Eurostat showed.

The jobless rate fell slightly to a seasonally adjusted 6.8 percent in March from revised 6.9 percent in February. In the same period last year, the unemployment rate was 8.2 percent.

The rate was forecast to drop to 6.7 percent from February's initially estimated 6.8 percent.

The number of unemployed in the currency bloc totaled 11.274 million, down by 76,000 persons from February. Compared to last year, the unemployment decreased by 1.931 million.

The youth unemployment rate was 13.9 percent in March versus 14.0 percent in February.

The EU unemployment rate came in at 6.2 percent, down from 6.3 percent a month ago.

The Purchasing Managers' survey showed that the eurozone employment grew at the sharpest pace in five months in April, albeit with hiring constrained in many firms due to labor shortages.

With surveys showing that the labor market is exceptionally tight, wage growth is likely to increase this year, Capital Economics economist Jack Allen-Reynolds said.

Official data showed that the number of those without jobs in Germany decreased by 13,000 in April from March, compared to the expected decline of 15,000. The jobless rate remained unchanged at 5.0 percent in April, as expected.

Eurozone factory-gate inflation accelerated to 36.8 percent in March from 31.5 percent in February, Eurostat reported. The expected increase was 36.3 percent.

The annual growth in pipeline inflation was driven by the 104.1 percent surge in energy prices. Producer prices of intermediate goods grew 22.6 percent and that of capital goods by 6.5 percent.

Producer prices of durable and non-durable consumer goods increased 7.9 percent and 8.7 percent, respectively.

Excluding energy, producer prices gained 13.6 percent, faster than the 12.3 percent rise in the previous month.

On a monthly basis, producer prices rose 5.3 percent in March, after a 1.1 percent increase in February and faster than the 5.0 percent increase economists had expected.