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Jan 8, 2014

With unemployment steadying and retail sales surging, eurozone recovery hopes mount

Latest report shows stable unemployment rate, biggest increase in retail sales in 12 years
By Pan Pylas/The Associated Press
    
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LONDON (AP) — Glimmers of hope emerged Wednesday for the eurozone economy to suggest that the coming year will see the recovery gathering steam.

Official figures showed a stabilization in unemployment and the biggest increase in monthly retail sales in 12 years.

Eurostat, the EU's statistics office, said the eurozone's unemployment rate held steady in November at a record 12.1 per cent for the eighth month running after a modest 4,000 rise in the ranks of the jobless to 19.24 million. Since September's 12.2 per cent rate was revised down, 12.1 per cent is now the record.

The agency also said retail sales during the month spiked by 1.4 per cent, way ahead of predictions in the markets for a more modest increase of around 0.3 per cent.

The increase was the highest monthly gain since November 2001 and suggests households may finally be thinking that the region's debt crisis is past its worst and that the recovery has legs.

“The outlook is starting to brighten a little for eurozone consumers,” said James Howat, European economist at Capital Economics.

Despite the signs of improvement, the eurozone has huge challenges, not least in getting unemployment down.

Wednesday's figures highlighted disparities across the then 17-country eurozone. The bloc now counts 18 members following Latvia's adoption of Europe's single currency at the start of the year.

While countries like Germany and Austria have unemployment rates around 5 per cent, those at the forefront of Europe's debt crisis, such as Greece and Spain, have over one in four of their people out of work.

The situation among the young there is even worse, though Greece appears to be showing some improvement on that front, with 54.8 per cent of those aged 15-24 out of work at last count in September, compared with 57.7 per cent the previous month.

Policymakers are hoping the eurozone's return to economic growth may get unemployment down. So far, the eurozone's recovery from its longest-ever, though not deepest, recession has been paltry but most economists are predicting a modest pick up this year, with even Greece emerging from a six-year depression that has seen its overall economic output shrink by over a fifth.

    
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