The eurozone unemployment rate rose for a fifth consecutive month in August, data released by Eurostat showed on Thursday.

The seasonally adjusted jobless rate rose to 8.1 per cent in August from 8 per cent in July, which was revised from 7.8 per cent. The relatively small increase in the unemployment rate from 7.2 per cent in March shows how short-term work schemes were key in suppressing massive job losses.

This has been beneficial for the recovery of domestic demand as jobs and incomes have largely been maintained despite the large shock to the economy. For the whole of the EU, the unemployment rate also rose for a fifth month in a row in August, climbing to 7.4 per cent from 7.3 per cent in July.

Meanwhile, the UK manufacturing sector continued its recovery from the coronavirus-induced downturn during September. The IHS Markit/CIPS Purchasing Managers’ Index (PMI) for manufacturing fell slightly to 54.1 in September, down from August’s two-and-a-half-year high of 55.2. The index has stayed on the positive side of its no-change mark of 50 for four successive months – its longest expansion streak since early 2019.

Output grew for a fourth successive month, but at a slower pace, amid increased inflow of new work, companies reopening and staff returning to work. The growth was led by large manufacturers.

The survey also shows that although manufacturers shed jobs for an eighth consecutive month, the pace of reduction was the slowest since February.

Finally, the US Commerce Department said on Thursday that new home sales rose by 4.8 per cent to a seasonally-adjusted annual rate of 1.011 million units during August. That is the highest level since September 2006. New home sales are counted at the signing of a contract, making them a leading housing market indicator.

July’s sales growth was revised upward to 965,000 units from the previously reported 901,000 units. Economists had forecast new home sales, which account for more than 10 per cent of housing market sales, slipping by one per cent to 895,000 units.

Sales of new single-family homes increased to their highest level in almost 14 years in August, suggesting that the housing market continued to gain momentum even as the economy’s recovery from the COVID-19 recession appears to be slowing.

This report was compiled by Bank of Valletta for general information purposes only.