Euro area jobless rate remains flat in October, Italian jobless rate to pick up further in due course

The jobless rate in euro area moved sideways. The lack of underlying inflationary pressures continues to be at odds with the tighter labor market in the currency bloc, noted Daiwa Capital Market Research in a report. The jobless rate has dropped steadily since its peak above 12 percent in 2013 to 8.1 percent this year. However, with employment growth having decelerated recently, unemployment has been stuck at this rate since July.

However, there were further rebounds in certain member states in October. Having been unchanged for the previous four months, Germany’s jobless rate on the EU measure dropped 0.1 percentage point to a fresh post-reunification low of 3.3 percent, while French jobless rate dropped 0.1 percentage point to 8.9 percent, its lowest reading since March 2009.

Meanwhile, the unemployment rate in Spain maintained its downward trend, falling for the ninth month in 2018 to 14.8 percent. However, on the contrary, Italian jobless rate rose in October to 10.6 percent, albeit principally on the back of higher participation.

“But with revised GDP data today signalling that the Italian economy contracted in Q3 for the first quarter since Q214, with the 0.1 percent Q/Q drop underpinned by declining household consumption and investment, we would not be surprised to see a further pickup in Italy's unemployment rate in due course”, added Daiwa Capital Market Research.

At 17:00 GMT the FxWirePro's Hourly Strength Index of Euro was bearish at -79.2602, while the FxWirePro's Hourly Strength Index of US Dollar was slightly bullish at 71.8942. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex