BRUSSELS: The eurozone unemployment rate improved only marginally in February, official data showed on Monday, stoking concerns the economy could be slowing after only a modest recovery.
Analysts said that while the economy is holding up despite recent financial market volatility and concerns over the outlook for China, job gains may not be enough to help it get it through the current soft patch.
The Eurostat statistics agency said unemployment in the 19-nation eurozone fell to 10.3 percent in February, a four-and-a-half year low, from a revised 10.4 percent in January.
The January figure was originally given as 10.3 percent last month and analysts had expected the February jobless rate to come in unchanged at 10.3 percent.
Unemployment hit a record high 12.1 percent during the worst of the debt crisis.
Jennifer McKeown at Capital Economics said Monday’s figures “suggest the labour market remains in reasonable health although it is still too weak to generate any real inflationary pressure.”
Inflation — a key reflection of consumer demand — has bounced along the bottom for months, way short of the European Central Bank’s target of near 2.0 percent.
“Looking ahead, survey evidence suggests that the eurozone’s labour market recovery is beginning to slow,” McKeown added.
The ECB launched a massive stimulus programme in early 2015 but to little apparent effect and last month added even more unprecedented measures in an effort to get the economy back on track.
The ECB at the same time cut its eurozone growth forecasts for 2016 and 2017 to 1.4 percent and 1.7 percent, from the previous 1.7 percent and 1.9 percent, respectively.
More damaging still, it slashed its inflation estimates to just 0.1 percent from 1.0 percent for this year and to 1.3 percent from 1.6 percent for 2017.
Eurostat said there were 16.63 million jobless in the eurozone in February, down 39,000 from January.
The EU unemployment rate was unchanged at 8.9 percent in February, it said.
The lowest jobless rates were in Germany, 4.3 percent, and the Czech Republic on 4.5 percent while the highest were in debt-laden Greece at 24 percent and Spain with 20.4 percent.
Howard Archer at IHS Global Insight said that while eurozone unemployment fell for a 15th consecutive month, “it is notable that the decline of 39,000 was the smallest drop since May 2015.
“This stokes concern that recent slower eurozone growth and softer business confidence could now be increasingly weighing down on the labour market,” Archer said in a note.
On the positive side, the improvement might encourage the consumer to spend more, which will be crucial if eurozone growth is to be able “regain momentum over the coming months after stuttering recently.”
The eurozone economy grew 0.3 percent in the last three months of 2015, unchanged from the previous quarter but down on the 0.4 percent gain of the second quarter and 0.6 percent in the first.