Euro area jobless rate remains unchanged in January, wage growth to accelerate gradually in quarters ahead

The headline euro area jobless rate came in at 8.6 percent in January, as expected. Rather than representing a fall, however, that matched the pace in December, which was downwardly revised by 0.1 percentage points. And among the large member states, just Spain recorded a further decline, while rates in Germany and France were unchanged, and Italy saw a rise of 0.2 percentage point to 11.1 percent.

However, the headline euro area jobless rate was still 1 percentage point lower than a year earlier, 3.5 percentage points lower than the post-crisis peak, and the joint-lowest since the end of 2008. Following a drop in the number of workers unemployed of more than 150k the previous month, January saw just a modest further fall of 19k to a little over 14.11 million, still however over 5.2 million below the recent peak in 2013.

The youth jobless rate dropped to 17.7 percent, nearly 7 percentage points below the peak. In spite of the limited rebound in January, with the headline euro area unemployment rate widely consistent with, or even below many estimates of the euro area structural jobless rate, the ECB is expected to maintain hopes of a marked rise in wage growth ahead, noted Daiwa Capital Market Research in a report.

“We expect only a continued gradual, rather than sudden accelerated, pickup in wage growth over coming quarters, which is why we also forecast only a very slow pickup in underlying inflation too”, added Daiwa Capital Market Research.

At 21:00 GMT the FxWirePro's Hourly Strength Index of Euro was bullish at 83.2062, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at 25.9651. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest