Eurozone Inflation Accelerates In November

Eurozone inflation accelerated in November on food and services cost, flash data from Eurostat showed Friday.

Inflation rose more-than-expected to 1 percent in November from 0.7 percent in October. Economists had forecast the rate to rise to 0.9 percent.

Headline inflation remained well below the European Central Bank’s target of “below, but close to 2 percent.”

On a monthly basis, consumer prices dropped 0.3 percent in November.

Core inflation that excludes energy, food, alcohol and tobacco, climbed to 1.3 percent from 1.1 percent in October. The rate also exceeded the expected 1.2 percent.

Data showed that food, alcohol and tobacco prices increased 2 percent and non-energy industrial goods prices climbed 0.4 percent. Services costs advanced 1.9 percent. Meanwhile, energy prices declined 3. percent.

Another report from Eurostat showed that the unemployment rate fell to 7.5 percent in October from 7.6 percent in September. This was the lowest rate since July 2008.

The number of unemployed decreased by 31,000 from September to 12.334 million in October. On a yearly basis, unemployment declined 761,000.

The unemployment rate among youth aged below 25, fell marginally to 15.6 percent in October from 15.7 percent in September.

November’s jump in inflation is unlikely to be the beginning of a sustained upward trend in price pressures, Jessica Hinds, an economist at Capital Economics, said. Inflationary pressure from the labor market will remain muted. As a result, the ECB still has a lot of work to do to get inflation rising, Hinds noted.

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