2015.12.0107:46:00UTC+00Eurozone Jobless Rate Near 4-year Low; German Unemployment At Record Low

The euro area unemployment rate declined to its lowest level since early 2012, but it is unlikely to lift wage growth and generate inflationary pressure as joblessness remains at an elevated level. Meanwhile, German unemployment dropped to a record low even as rising fears of joblessness due to the huge influx of migrants hurt consumer sentiment in the biggest euro area economy.

Elsewhere, a survey showed that manufacturing upturn in the 19-nation bloc gained further momentum as initially estimated in November.

The unemployment rate dropped marginally to 10.7 percent in October from 10.8 percent in September, Eurostat reported Tuesday. This was the lowest rate since January 2012. It was forecast to stay at 10.8 percent in October.

The number of unemployed persons decreased by 13,000 from September to 17.24 million in October. Compared to the previous year, unemployment fell 1.302 million.

In the EU28, the jobless rate remained unchanged at 9.3 percent in October. This was the lowest rate reported in the EU28 since September 2009.

The euro area youth unemployment rate was 22.3 percent compared with 23.3 percent in the same period of last year.

The recovery in the labor market and the wider economy remains too weak to generate inflationary pressure. Accordingly, the European Central Bank is very unlikely to be deterred from announcing stronger policy support on Thursday.

Bert Colijn at ING Bank NV said the natural rate of unemployment is estimated to be around 9.5 percent, so it will likely be a while before significant wage pressures will come from the narrowing of the job market.

Inflation will not receive much push from wages and unemployment, which supports the expected upcoming decision of further monetary stimulus by the European Central Bank on Thursday, the economist added.

Among Eurozone member countries, the lowest unemployment rates in October were seen in Germany, followed by the Czech Republic and Malta. On the other hand, Greece with 24.6 percent unemployment in August had the highest rate.

Data published by the Federal Labor Agency showed that the German jobless rate dipped to a record-low 6.3 percent in November from 6.4 percent in October. The figure was forecast to remain unchanged at 6.4 percent.

The number of people out of work declined by 13,000 to 2.77 million in November. The decline exceeded the expected fall of 5,000.

Italy's unemployment rate dropped for a fourth straight month in October, setting a fresh low since late 2012, the statistical office Istat reported. The jobless rate fell to 11.5 percent from 11.6 percent in September.

According to final PMI survey from Markit, the Eurozone manufacturing index rose to 52.8 in November, in line with flash estimate, from 52.3 in October. It was the highest reading since April 2014. The PMI has remained above the no-change mark of 50.0 for 29 straight months.

Manufacturing employment in the bloc rose for the fifteenth successive month in November, with the rate of jobs growth ticking to its highest since August.