Eurozone jobless, inflation rates steady

The eurozone unemployment rate was steady at a near-record 12 percent in January, with a modest economic recovery yet to produce any sharp headline improvement, while February inflation was also flat, data showed on Friday. The official figures suggest the bloc continues to make slow progress after exiting a record 18-month recession in second quarter 2013 but growth since then has been far from stellar, reflected in the high jobless figures and low inflation. The January outcome means the jobless rate has been flat at 12 percent since hitting a record 12.1 percent in September. For the 28-member European Union, the January unemployment rate was also unchanged at 10.8 percent. The eurozone jobless total in January was 19.18 million, with 26.23 million out of work in the EU, representing falls of 67,000 and 449,000 compared with January 2013. Compared with December 2013, however, both totals were up by 17,000. By country, the lowest January unemployment rates were in Austria, on 4.9 percent with 5.0 percent in Germany, Europe's biggest economy. Twice-bailed out Greece was hardest hit with 28 percent (based on November figures) followed by Spain on 25.8 percent. Jobless rates for the under-25s continued to be a major headache, running at an unchanged 24 percent in the eurozone and 23.4 percent in the EU, up from 23.3 percent in December. Inflation in the 18-nation bloc was flat at 0.8 percent in February, Eurostat said. By component, food, alcohol and tobacco prices rose 1.5 percent in February, a slower rate than the 1.7 percent reported in January while energy costs were down 2.2 percent after a fall of 1.2 percent, Eurostat said. Inflation has trended steadily lower in recent months, coming in well below the European Central Bank target rate of close to but just under 2.0 percent and stoking concerns about a risk of deflation, or falling prices in absolute terms. Deflation is dangerous because if consumers believe prices will fall they put off purchases, which forces companies to delay investment,hitting salaries and jobs, and so setting up a vicious downward circle. ECB chief Mario Draghi reiterated Thursday that whil eurozone inflation is low, he saw no danger of deflation as there was no "evidence of consumers postponing expenditure plans." If current inflation rates "can clearly not be considered close to 2.0 percent ... we are clearly not in deflation, which is defined as a self-reinforcing fall in prices that is broad-based across items and across countries," Draghi said.