According to figures released by Eurostat on Wednesday, the eurozone unemployment rate increased only marginally to 7.3 per cent in April while the March figure was revised down to 7.1 per cent.

This surprisingly small increase since the start of the coronavirus crisis can be attributed to the government job subsidy schemes and the fact that a significant number of the newly-unemployed has not been picked up by the statistics as people need to be looking for work to be counted as unemployed. The jobless figure came well below economists’ forecast of 8.2 per cent. The number of unemployed increased by 211,000 from March to 11.92 million in April.

In the meantime, the European Central Bank announced on Thursday that it will increase its Pandemic Emergency Purchase Programme (PEPP) by €600 billion, as the eurozone faces its worst recession in decades due to the impact of the coronavirus pandemic.

The latest package is in addition to the €750 billion of government bond purchases that the ECB announced in March, taking the total to €1.35 trillion. The central bank also said that the duration of its crisis bond-buying programme would be extended from the end of 2020 until June 2021, or until the bank believes the crisis is over. This expansion will further ease the general monetary policy stance and support funding conditions in the real economy, especially for businesses and households, the ECB said.

Finally, China’s services sector emerged from a three-month streak of negative growth to register strong growth in May, while the rest of the world saw further declines in activity even as lockdowns began to ease. The Caixin/Markit services Purchasing Managers’ Index, or PMI, rose to 55.0 in April from 44.4 in April, hitting the highest level since late 2010. The 50-mark separates growth from contraction on a monthly basis. China was the first major economy to begin reopening after the coronavirus outbreak.

The services sector is an important generator of jobs which accounts for about 60 per cent of the Chinese economy. But even as service providers reported a pick-up in output, they continued to cut jobs.

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