(CN) — The European Union seems to be making good on a New Year’s resolution to cut inflation. Data published by Eurostat on Wednesday tracked January inflation down to 8.5%, nearing its lowest point since last summer.
Largely driven by rising costs of energy, inflation peaked at 10.6% this past October. At 17.2%, European energy inflation is less than half the October rate of 41.5%. Excluding energy, inflation would be calculated at just 7.3%.
Prior to Russia's invasion of Ukraine, the EU imported more than a quarter of its crude oil from Russia, along with 46% of solid fuel and 40% of natural gas needed.
In anticipation of Russia potentially cutting off energy supplies to the EU, member states agreed to reduce their energy use in the months leading up to winter. While the EU remains largely dependent on Russian oil, Eurostat tracked a dramatic 20% reduction in fossil fuel use this past fall.
Still, energy makes up a small portion of household spending, around 10%. Spending on services accounts for 44% of household consumption, followed by non-energy industrial goods at 26% and food, alcohol and tobacco at 20%.
Inflation remains highest in Latvia at 21.6%, followed by Lithuania and Estonia at 18%. All three border Russia.
January inflation was reported lowest in Luxembourg and Spain at 5.8%.
An analysis from Goldman Sachs anticipates EU inflation to continue to ease throughout the year. The European Union is expected to release its quarterly forecast in the coming weeks.
While inflation cools off, unemployment remains at a 14-year low of 6% for the third month in a row. That amounts to 13 million people out of work who are looking for work, roughly half a million fewer compared with this time last year.
Youth unemployment rose, with 2.8 million people under the age of 25 out of work, about 15%. The unemployment rate for women (6.4%) is slightly higher than for men (5.8%).
Using standards set by the International Labor Organization, Eurostat defines an unemployed person as someone who has been out of work for about a month, is looking for work, and is able start a new job within two weeks.
The EU is using both inflation and unemployment to measure the continent’s economic recovery from the Covid-19 pandemic.
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