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Eurozone jobless rate falls in October

[BRUSSELS] Eurozone unemployment slipped to its lowest level for nearly four years in October, official data showed on Tuesday, beating analyst expectations and confirming a slow recovery in Europe's job market.

The European Union's Eurostat agency said unemployment in the 19-country single currency bloc fell to 10.7 per cent in October from 10.8 per cent in September, reaching the lowest level since Jan 2012.

Joblessness dropped in most big economies in the eurozone, with the worrying exception of France, but this would not dissuade the European Central Bank from holding back on boosting the economy with more stimulus - known as quantitative easing - later this week, analysts said.

"October's eurozone unemployment data confirmed that the region's steady labour market recovery has continued, but the bigger picture is that unemployment remains too high to boost wage growth and inflation," said Jennifer McKeown, Senior European Economist at Capital Economics.

"Accordingly, the ECB is very unlikely to be deterred from announcing stronger policy support on Thursday," she added, with fighting the dangerous effects of falling prices in Europe still the central bank's main priority.

All attention now turned to eurozone inflation data due on Wednesday.

The solid jobs data, as well as an upbeat survey of manufacturers in the eurozone, "may have somewhat tempered investors' expectations for more QE," said analyst Connor Campbell at traders Spreadex.

At the height of the eurozone debt crisis in 2013, joblessness in the eurozone stood at above 12 per cent and has gradually fallen since then.

However, it still remains way above the near-7.5 per cent level seen during the economic boom leading up to the financial meltdown in 2008.

As usual, in October the level of joblessness varied widely across the eurozone.

The highest rate was in debt-stricken Greece, at 24.6 per cent in August, the latest data available, but down from 24.9 per cent a month earlier.

Youth unemployment in Greece stood at 47.9 per cent and at a still huge 47.7 per cent in Spain.

The lowest rate overall in the bloc was in economic powerhouse Germany, unchanged at an ultra low 4.5 per cent.

France, the eurozone's second biggest economy, was stable at 10.8 per cent, though this still meant a rise of 25,000 job-seekers.

Unemployment is a key issue for France's Socialist government with regional elections five days away in which the extreme right seems set to make a huge breakthrough.

President Francois Hollande has vowed not to seek re-election in 2017 if he fails to reduce joblessness by the end of his mandate.

For the whole eurozone, economists surveyed by the Factset data company had forecast no change in the jobless rate.

AFP