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Unemployment continues to fall as producer prices rise in Europe

Energy has become particularly more expensive to produce over the last year, Eurostat finds.

(CN) — Unemployment dropped 1.5% in the eurozone in January 2022 compared to a year ago, and prices for manufacturers have risen there by 30.6% over the same timeframe, per the European Union’s statistics agency.

Eurostat, an EU commission responsible for issuing statistics and indicators for the 27-nation organization, issued releases Thursday detailing the status of the region’s economy. The eurozone comprises those 19 EU members that use the euro as their legal tender.

The seasonally adjusted unemployment rate in the euro area was 6.8% in January 2022, continuing its downward trend since peaking at more than 8.5% as the Covid-19 pandemic swept the world in the spring of 2020. Eurostat pinned unemployment at 8.3% in January 2021 and 7.0% last December.

The wider European Union saw similar rates: considering all 27 nations in the EU, unemployment dropped from 7.5% in January 2021 to 6.2% this January.

A reduction in unemployment could indicate that more people looking for work have found it — or that more people are leaving the labor force, that is, retiring or otherwise no longer seeking work.

When the data is broken down by gender, the sexes have been evenly impacted by this trend: for both men and women, the unemployment rate decreased by 0.1% between December 2021 and January 2022. As of January 2022, 6.6% of eurozone men seeking work remain unemployed, while for women in the euro area, that figure stands at 7.2%.

Eurostat also put out indicators on industrial producer prices, which rose 5.2% in the eurozone between last December and this January.

The producer price index is an indicator that tracks average changes in the basic prices — excluding deductible taxes and including subsidies on products — that producers receive for their output. It differs from the more widely known consumer price index because it measures costs from makers’ perspective, rather than buyers’ viewpoint.

That is to say, while a consumer price index shows what products are becoming cheaper or more expensive to buy, a producer price index picks out which products are becoming cheaper or more expensive to make.

Notably, the euro area’s producer price index has risen 30.6% over the year between January 2021 and January 2022. Here again, the EU as a whole hemmed closely to the eurozone’s trends: industrial producer prices rose 4.9% from last December, and 30.3% compared to last January.

The greatest price rises are in the energy sector, where industrial producer prices rose 11.6% in the euro area compared to last December and 10.7% across the whole EU over the same period.

Russia’s invasion of Ukraine has spiked energy costs across the globe. Recent Eurostat reports connected rising Europe’s energy costs to record-high inflation in the region. Though Europe is increasingly adopting renewable sources of energy, the region’s overwhelming reliance on fossil fuels continues to tie the EU economy to the cost of a barrel of oil.

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