The first drop in eurozone unemployment in three years and a bigger-than-forecast pickup in annual inflation may ease pressure on the European Central Bank (ECB) to reduce interest rates for the 17-member currency bloc.
The jobless rate edged down to 12.1 per cent in October, despite being forecast to remain at September's level of 12.2 per cent, the European Union statistics office Eurostat said on Friday.
There were 19.298 million people out of work in the 17-member currency bloc in November following a drop of 61,000 from the previous month.
The annual rate of consumer inflation, meanwhile, climbed from 0.7 to 0.9 per cent in November, well below the two per cent level deemed by the ECB to be right for growth.
Analysts had expected inflation to edge up to 0.8 per cent this month, after the metric slumped to a four-year-low of 0.7 per cent in October.
The pickup, driven by higher energy and service sector costs, came despite signs of a slowdown in annual food prices. After rising by 1.9 per cent in October, food prices climbed by 1.6 per cent this month, according to Eurostat.
The inflation and jobs data comes ahead of next week's monthly meeting of the ECB's governing council, which sets interest rates for the currency bloc. The Frankfurt-based bank is also expected to unveil its latest projections for growth and inflation.
Analysts believe the slight decrease in unemployment and the pickup in inflation means the bank may not have to reduce interest rates to boost the fragile eurozone economy.
"The uptick in eurozone inflation in November will ease concerns about deflationary risks and hence takes off some of the pressure on the ECB to take further pre-emptive action at next week's policy meeting," said ING Bank economist Martin van Vliet.
Many analysts also see inflation remaining below one per cent for the first part of next year.
The eurozone emerged from an 18-month recession during the second quarter, expanding by a meagre 0.1 per cent in the three months to the end of September.
Austria and Germany posted the lowest jobless rates at around five per cent respectively, while nations at the centre of the euro debt crisis - Greece and Spain - continued to top the list, with unemployment figures remaining above 26 per cent.
"The drop in the eurozone unemployment rate does not change the picture of a very weak labour market," said Jonathan Loynes, chief European economist with the Capital Economics group.
Those out of work included 3.577 million people under the age of 25, taking the rate for that age group to 24.4 per cent.
The data painted a particularly grim picture for Italians under the age of 25. Youth unemployment in the eurozone's third-biggest economy hit a record high of 41.2 per cent in October, the highest rate since current records begun in 1977.
Italy's overall jobless rate remained unchanged from September at 12.5 per cent, which also represent a 36-year high.
Unemployment in the 28-member EU fell by 75,000 people to a total of 26.654 million, but this was not enough to bring the rate down from the previous month's figure of 10.9 per cent.
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