Eurostat: Euro Area’s Inflation Defies Forecasts, Stays at 5.3%

Highlights

• Euro area inflation consistent at 5.3%.
• Energy sector shows significant improvement.
• Unemployment rates remain steady in 2023.

Euro Area Inflation Remains Stable Amid Varied Sector Changes

Euro area’s annual inflation is anticipated to maintain its 5.3% rate in August 2023, consistent with the July figures, as per Eurostat’s flash estimate. This was higher than the 5.1% forecast. Within the key components affecting inflation, the most significant annual rate is predicted for food, alcohol, and tobacco at 9.8%, though it shows a decrease from July’s 10.8%. Services follow suit with a slight dip from July’s 5.6% to 5.5% in August. Non-energy industrial goods have also seen a reduction from 5.0% in July to 4.8% in August. Notably, the energy sector, while still negative, improves from -6.1% in July to -3.3% in August.

Unemployment Rates Across the Euro Area and EU Show Stability

The seasonally-adjusted unemployment figures for July 2023 remained consistent with June 2023, with the euro area’s unemployment rate steady at 6.4%. A year-on-year comparison reveals a decline from 6.7% in July 2022. Similarly, the EU witnessed a stable unemployment rate at 5.9%, which is a slight decrease from 6.1% in the previous year.

Quantifying the Unemployed Population

Eurostat’s data highlights an estimated 12.928 million unemployed individuals across the EU in July 2023, with 10.944 million specifically in the euro area. This statistic indicates an increase from June 2023, with 35,000 more unemployed in the EU and an addition of 73,000 in the euro area. Yet, when compared with July 2022, there is a silver lining. The number of unemployed individuals has decreased by 209 thousand in the EU and by a larger 264 thousand in the euro area.