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Article updated: 2/1/2013 7:30 AM

Eurozone unemployment holds steady at 11.7 percent

By

BRUSSELS -- Europe received a welcome dose of good news Friday with the news that both unemployment and inflation across the 17 European Union countries that use the euro are lower than anticipated.

Eurostat, the EU's statistics office, said unemployment in the eurozone held steady at 11.7 percent in December. Since November's rate was revised down from 11.8 percent to 11.7 percent, December's equates to a new joint-record.

Still, the figures are slightly better than anticipated in the markets, with many fearing that the rate would rise to 11.9 percent as the eurozone as a whole remains stuck in a recession.

Greece has the highest jobless rate in the eurozone, leapfrogging Spain. At the end of October, Greece's unemployment rate was 26.8 percent against Spain's 26.1 percent. Greece's statistics are compiled on a different timeframe.

As with the overall picture, Greece now has the highest level of youth unemployment in the eurozone. In October a staggering 57.6 percent of under 25's were out of work, just ahead of Spain's 55.6 percent rate for December.

The jobless figures don't make for completely grim reading throughout the eurozone. Austria had the lowest unemployment rate in the eurozone in December at 4.3 percent, while Germany's was a relatively-low 5.3 percent. Unemployment across the broader 27-country EU also remained steady at 10.7 percent. This, according to Eurostat, compares with 7.8 percent in the U.S. and around 4 percent in Japan.

Separately, Eurostat reported that inflation in the eurozone fell to 2 percent in the year to January, down from 2.2 percent the previous month. The decline was unexpected and means that prices are rising more or less in line with the European Central Bank's mandate of "close to, but below 2 percent."

The figures may prompt speculation that the ECB could cut borrowing costs further at its next rate-setting meeting on Thursday. Currently, its benchmark rate is at its record low of 0.75 percent and many economists argue that it should be cut further to help stimulate the ailing economy of the eurozone.

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