Unemployment falls to a record low across the eurozone, underlining ECB concerns over higher wages becoming embedded in inflation expectations.
Eurozone unemployment fell to a record low 6.6% in May, falling 0.1 pp from April's 6.7%. This is down from 8.1% seen in May 2021. Youth unemployment across the region saw another substantial decrease, down 0.7pp to 13.1%.
Continued improvement in the Eurozone unemployment rate implies increased wage pressures, potentially adding pressure to second round inflation effects, further complicating the ECB's hiking cycle which is set to commence in July.
With the German labour market registering a 0.3pp increase in their June unemployment rate as a result of accounting for the influx of registered Ukrainian refugees, upcoming labour reports could show increasing unemployment rates despite having remained otherwise stable, depending how stats agencies handle the influx.