July 31 (Bloomberg) -- The unemployment rate in the euro area fell in June as the currency bloc gradually shakes off the legacy of the region’s debt crisis and longest-ever recession.
The jobless rate dropped to 11.5 percent from 11.6 percent in May, the European Union’s statistics office in Luxembourg said today. While that’s still near a record high of 12 percent, it is less than the 11.6 percent median forecast of 31 economists in a Bloomberg News survey.
Sluggish growth rates combined with low inflation in the currency bloc have prompted European Central Bank President Mario Draghi to warn of a stagnation that could lead to high unemployment becoming structural. The ECB unveiled a range of measures in June including targeted long-term loans for banks and a negative deposit rate to boost prices and growth.
“As long as the economy doesn’t expand faster we won’t see a significant improvement on the European job market,” said Robert Kuenzel, an economist at Daiwa Capital Markets Europe Ltd. in London. “Companies are reluctant to hire unless quarterly growth rates reliably exceed 0.25 percent for a longer period of time.”
Gross domestic product in the euro area grew 0.2 percent in the first three months this year and economists predict quarterly rates of 0.3 percent for the rest of this year, according to a separate Bloomberg survey. Last year, the region emerged from its six quarters of contraction.
Joblessness continued to vary widely across the euro area in June, from a low of 5 percent in Austria to 24.5 percent in Spain.
Ludwigshafen, Germany-based BASF SE said on July 24 that it plans more than 2,000 job cuts by the end of 2017 even as the world’s biggest chemical company stands by its target to increase profit slightly this year.
Unemployment in the euro area will average at 11.5 percent in 2015 and 11.3 percent in 2016, according to Bloomberg’s monthly survey of economists.
To contact the reporter on this story: Stefan Riecher in Frankfurt at email@example.com
To contact the editors responsible for this story: Craig Stirling at firstname.lastname@example.org Zoe Schneeweiss, Paul Gordon