July 1 (Bloomberg) -- The euro-area unemployment rate was unchanged in May as the currency bloc struggled to shake off the legacy of the debt crisis.
The jobless rate remained at 11.6 percent after the April number was revised down from 11.7 percent, the European Union’s statistics office in Luxembourg said today. The median forecast in a Bloomberg News survey of 26 economists was for the rate to hold at the previous level.
The data “highlight that the euro-zone’s economic recovery is still too weak to erode the significant amount of slack in the labor market,” said Jessica Hinds, an economist at Capital Economics in London. “Looking ahead, the recovery in the labor market looks set to remain painfully slow.”
The European Central Bank last month unveiled a package of measures including a negative deposit rate and conditional long-term loans to banks to stoke lending and drive growth. ECB President Mario Draghi said in April that his “biggest fear” is a stagnation that leads to high unemployment becoming structural.
Manufacturing in the euro area slowed more than initially estimated in June, London-based Markit Economics said today. It grew at the fastest pace since 2007 in Spain, while contracting for a second month in France.
The euro fell after the releases and traded at 1.3681 at 11:22 in Frankfurt, down 0.1 percent today.
Euro-zone growth will remain sluggish through year-end, with expansion of 0.3 percent in the second and third quarters accelerating to 0.4 percent in the last three months, according to a separate Bloomberg survey of economists.
The average unemployment rate is seen at 11.7 percent for 2014, dipping to 11.3 percent in 2016, another survey shows.
Joblessness continued to vary widely across the euro area in May, from a low of 4.7 percent in Austria to 25.1 percent in Spain. Greece reported a rate of 26.8 percent for March. The unemployment rate for people under 25 in the euro zone decreased to 23.3 percent from 23.4 percent.
Siemens AG, Europe’s largest engineering company, will eliminate at least 11,600 positions as it cuts about 1 billion euros ($1.4 billion) in costs, the Munich-based company announced on May 29.
Inflation remained unchanged at 0.5 percent in June at about a quarter of the ECB’s target of just below 2 percent. The euro area faces a prolonged period of low inflation, Draghi said last month, and the ECB may act again to fight the threat of a deflationary scenario if necessary.
The Frankfurt-based central bank’s 24-member Governing Council will announce this month’s rate decision on July 3. Officials will leave the benchmark rate unchanged at a record low of 0.15 percent, according to a Bloomberg survey of economists.
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