Eurozone unemployment rate drops below 10% in October

The eurozone unemployment rate unexpectedly declined in October, according to figures released by Eurostat.

The unemployment rate fell to 9.8% from 9.9% the month before and 10.6% in October 2015. This is the lowest rate recorded in the euro bloc since July 2009. The rate for September was revised down to 9.9% from a previous estimate of 10%.

In the EU-28 group of countries, the rate nudged down to 8.3% from 8.4% in September and 9.1% in October 2015, which is the lowest rate recorded since February 2009.

Among the member states, the lowest unemployment rates were seen in the Czech Republic and Germany, with the highest rates in Greece and Spain.

Pantheon Macroeconomics said it was a “surprising and upbeat headline” but cautioned that big month-to-month movements in these data are often revised.

“The labour market is a lagging indicator in the eurozone, and it likely will continue to fall in the coming three-to-six months. This decline will mainly be driven by countries outside Germany, but we also remind that the structural level of unemployment in France, Italy and Spain is higher than in Germany, the US and the UK which are often used as benchmarks. This is particularly relevant in France, where we think the structural level of unemployment could be as high as 7%-to-8%. In Italy and Spain, though, the room for further declines remain significant.”