Germany's jobless rate remained at a record low in May - is it sustainable and what does it tell us about growth prospects for the year?And what about Spain - almost 1 in 4 are still out of work but unemployment there still fell for the fourth straight month - is this further proof that the job market recovery remains solid?
Unemployment in Germany remained at a record low in May. It was another sign that private consumption will propel growth in Europe's largest economy. The number of people out of work fell by 6,000 - and it was already at its lowest level since German reunification. Most sectors were recruiting, only manufacturing showed a slight increase. Private consumption - not exports - is now Germany's main engine of growth. Impressive wage rises are helping and Germans are generally feeling optimistic. The jobs market in Spain has improved again too. The unemployment rate fell for a fourth consecutive month. But almost 1 in 4 are still out of work and CMC Markets' Jasper Lawler says political uncertainty is a worry too. SOUNDBITE: Jasper Lawler, Market Analyst, CMC Markets, saying (English): "The issue there is that perhaps under the current government maybe these jobs gains would be sustainable but if we see a political shake up in some of the peripheral countries that's obviously going to affect their jobs markets but it could also spill over into Germany." But inflation did return to the euro zone in May after five months of falls and stagnation. It's a sign the ECB's sovereign bond buying programme is working. It also leaves the central bank with a dilemma over when to end the stimulus. SOUNDBITE: Jasper Lawler, Market Analyst, CMC Markets, saying (English): "I think that is going to be a recurring problem, as the ECB's policy in effect works and brings some inflation back obviously supported by oil prices questions are going to get raised as to 'OK we're close to the 2 percent target now, when do you stop the programme', particularly from the Germans and the Bundesbank who were against the programme from the start." The rise in consumer prices will be a relief to ECB policymakers. But at 0.3 percent there's still room for improvement.