The unemployment rate in the eurozone fell to match a record low that was set a few months earlier, a report by Eurostat showed last week. This mirrored the surprising resilience of the US jobs market and increases the likelihood of a soft landing in both regions.
The combined unemployment rate in the 20 countries that share the euro currency fell to 6.4 per cent in November from 6.5 per cent in October, underpinned by a fall of 99,000 in the number of people who are unemployed and beating expectations for an unchanged 6.5 per cent. Despite the fact that the eurozone has been suffering from a soft patch, this did not impact the region’s unemployment rate, which has declined over the year.
Meanwhile, the global economy overcame the challenges of soaring inflation and geopolitical tensions better than expected in 2023, but it is now expected that global growth will slow for a third consecutive year in 2024, the World Bank said in its semi-annual Global Economic Prospects report published on Tuesday.
The world economy, which grew by three per cent in 2022 after falling sharply during the pandemic, fell back to 2.6 per cent last year and is expected to post a modest 2.4 per cent growth this year, the bank said. This is shy of the 3.1 per cent average rate recorded in the 2010s.
Even though the global economy is proving resilient in the face of recessionary risks, near-term challenges persist in the form of increasing geopolitical tensions, the bank said, leaving most economies vulnerable to slower growth in 2024 and 2025.
Finally, the US trade deficit unexpectedly contracted in November as imports of consumer goods fell to its lowest in the last year as a result of slowing domestic demand. Should the current trend persist, trade can result in having no impact on economic growth in the fourth quarter.
The US trade deficit narrowed to $63.2 billion in November from a revised $64.5bn in October, the report showed. Economists had predicted that the trade deficit would widen to $65bn.
“The weakness of both exports and imports in November suggests that weaker growth overseas is now being matched by a softening in domestic demand too,” said Andrew Hunter, deputy chief US economist at Capital Economics.
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