FX.co ★ Eurozone Economic Confidence Rises, Jobless Rate Falls

Eurozone economic confidence saw an uptick in May as the region rebounded from a recession and experienced a slight reduction in unemployment in April, according to data released on Thursday.

The European Commission's survey revealed that the economic confidence index edged up to 96.0 in May from 95.6 in April, albeit falling short of the anticipated rise to 96.2.

The boost in the economic sentiment index was attributed to increased confidence in industry, services, and among consumers, though this was somewhat offset by falling confidence in the construction sector.

In particular, the industrial sentiment indicator improved to -9.9 in May from -10.4 in April, yet it underperformed against the expected figure of -9.4. Meanwhile, the services confidence index aligned with forecasts, growing to 6.5 from 6.1 the previous month.

The consumer confidence index advanced to -14.3, up from -14.7, matching the preliminary estimate. This figure marked the highest level since February 2022.

Retail sector confidence remained stable in May, with the index holding steady at -6.8. In contrast, the construction sentiment index saw a minor decline to -6.0 from -5.9.

The employment expectations indicator continued its downward trend in May, slipping to 101.3 but staying above its long-term average.

Lily Millard, an economist at Capital Economics, remarked that the survey aligns with the notion of weak growth in the euro area. Although price pressures remain strong, they are gradually easing.

In parallel, Eurostat data indicated that the unemployment rate slightly dipped to 6.4 percent in April, contrary to expectations of it holding steady at 6.5 percent.

Unemployment fell by 100,000 from March, with the number of jobless individuals reducing by 101,000 compared to the same period last year. Additionally, youth unemployment decreased to 14.1 percent from 14.3 percent in the previous month.

Millard projected that the unemployment rate would likely hover around its current level for the remainder of the year.