Euro zone unemployment stays stable

Euro zone unemployment remained unchanged in September from a downwardly revised 7

Euro zone unemployment remained unchanged in September from a downwardly revised 7.8 per cent in August, data showed this afternoon.

The revised figure means unemployment has now been stable for four months at its lowest level for five years. A year ago, the jobless rate in the euro zone stood at 8.5 per cent.

Economists say a slow decline in unemployment over the past two years is gradually leading to increased purchasing power, and potentially raising pressure on wages.

They said the figures released did not change the picture of the euro zone economy or the expected timetable for any interest rate changes.

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Yesterday, the European Central Bank (ECB) left interest rates on hold at 3.25 per cent as expected, but ECB President Jean-Claude Trichet sounded a hawkish note on inflation.

Markets and analysts see one more rate rise this year, a 25-basis-point hike in December.

In the 25-nation EU, unemployment was stable at 8 per cent in September. That is still almost double the jobless rates in the United States at 4.6 per cent and Japan at 4.2 per cent.

Eurostat estimated that 11.5 million people were unemployed in the euro area in September and 17.4 million in the EU as a whole.