Eurozone Recovery Helps Unemployment

Eurozone Recovery Helps Unemployment

BRUSSELS (AP) -- The robust economic recovery across the 19-country eurozone persisted during the third quarter, helping unemployment fall to a near 9-year low, official figures showed Tuesday.

Eurostat, the European Union's statistics agency, said the eurozone economy grew by 0.6 percent during the July-September period. Though that's slightly down on the stellar 0.7 percent tick recorded in the second quarter, it's modestly higher than expectations for a 0.5 percent rise.

On an annual basis, the eurozone economy was 2.5 percent bigger, its highest rate since the first quarter of 2011.

The figures provide further confirmation that the eurozone economy has gained momentum this year after sidestepping a series potential risks, notably through the defeat of populist, euroskeptic parties in elections in major economies like France. Worries over Greece's future in the single currency bloc have also abated while the current tensions in Spain over the region of Catalonia's bid for independence do not yet appear to be shaking confidence either.

The strong growth has helped unemployment fall consistently over the past year, and in September the number of jobless declined by a further 96,000, which helped the unemployment rate drop to 8.9 percent from 9.0 percent the previous month. That's the lowest rate since January 2009, when the global economy was in the midst of its worst recession since World War II in the wake of the financial crisis.

Elsewhere, Eurostat said annual inflation in the eurozone dipped as anticipated in the markets to 1.4 percent in October from 1.5 percent. The main reason why inflation fell further away from the European Central Bank's goal of just under 2 percent was that the core rate, which strips out volatile items such as energy and food, unexpectedly fell to 0.9 percent from 1.1 percent. The consensus in the markets was for an unchanged rate.

A recent uptick in inflation towards the ECB's goal coupled with the improving economic backdrop prompted the central bank to ease the pace of its bond-buying stimulus program. Last week, the ECB said it would halve its bond purchases to 30 billion euros ($35 billion) per month starting in January, from 60 billion euros currently, and keep them going until at least September 2018. The bank kept some flexibility in its statement, saying that it could increase the purchases if the 19-country eurozone endures a new economic shock.