Euro zone unemployment at record lows, producer prices show record jump y/y

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BRUSSELS, March 3 (Reuters) – Euro zone unemployment fell to record lows in January as the economy continued to rebound from the pandemic slump, but industrial producer prices showed a record surge year-on-year because energy prices almost doubled, data showed on Thursday.

The European Union’s statistics office Eurostat said unemployment in the 19 countries sharing the euro fell to 6.8% of the workforce in January from 7.0% in December — the lowest jobless rate on record in the single currency area.

Economist polled by Reuters had expected a reading of 6.9%. Eurostat said 11.225 million people were without jobs in January, down from 11.439 million the month before.

But prices at factory gates, which herald price trends for consumers, jumped 5.2% month-on-month — more than double the market expectations — for a record 30.6% year-on-year surge, accelerating from a 26.3% jump in December.

Economists polled by Reuters had expected a 27.0% year-on-year rise.

The huge increase was mainly a result of an 11.6% monthly and a 85.6% annual increase in oil and gas prices, boosted already by the very threat of a Russian invasion of Ukraine before the aggression actually happened.

The producer price increase will be an additional headache for the European Central Bank because it is bound to boost consumer prices, which the bank wants to keep at 2.0%.

Consumer inflation was already at a record 5.8% in February and economists expect it will accelerate further.

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