Eurozone inflation rose slightly in October but it remained consistently below 1 percent, signifying the risk of deflation in the currency bloc. At the same time, the unemployment rate held steady at an elevated level in September.
Inflation rose marginally to 0.4 percent in October from 0.3 percent in September, flash data from Eurostat showed Friday. It has been below the 2 percent ceiling since February 2013.
Meanwhile, core inflation that excludes energy, food, alcohol and tobacco, slowed to 0.7 percent from 0.8 percent a month ago. It was forecast to remain unchanged at 0.8 percent.
The small rise in inflation reinforces the already very strong likelihood that the European Central Bank will sit tight at its November meeting and the bank will very probably remain in “wait and see” mode into the new year, IHS Global Insight’s Chief European Economist Howard Archer said.
With Eurozone HICP inflation still close to zero in October and the unemployment rate holding near a record high, there remains a significant risk of deflation in the single currency area, said Jennifer McKeown, an economist at Capital Economics.
Cost of food, alcohol and tobacco climbed at a faster pace of 0.5 percent after rising 0.3 percent in September. The annual increase in services cost rose to 1.2 percent from 1.1 percent.
Meanwhile, energy prices slid 1.8 percent, slower than the 2.3 percent fall in September. Non-energy industrial goods prices fell 0.1 percent versus 0.2 percent rise in September.
The euro area jobless rate remained stable at 11.5 percent in September, another report from Eurostat revealed today. The rate came in line with expectations.
Compared with August, the number of unemployed decreased by 19,000 persons in September. On a yearly basis, unemployment plunged 826,000. The youth unemployment rate fell to 23.3 percent from 24 percent last year.
In Germany, the number of people out of work decreased by 22,000 to 2.887 million in October and the jobless rate remained unchanged at 6.7 percent, the Federal Labor Agency said yesterday.
Italy’s jobless rate rose to 12.6 percent in September from 12.5 percent in August, Istat reported today. Meanwhile, the youth unemployment fell to 42.9 percent from 43.7 percent.
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