MADRID – Inflation in the 19 countries that use the euro cooled slightly in August, while the number of people out of work fell during July, developments likely to reinforce the European Central Bank’s cautious approach to dialing back monetary stimulus.
The latest economic signals follow data showing the eurozone’s economy slowed further in the three months through June, as exports sputtered and business confidence weakened on worries over future relations with the currency area’s largest trading partners.
The loss of momentum in 2018 contrasts with the US, where growth accelerated during the second quarter.
The European Union’s statistics agency said in a preliminary estimate Friday that consumer prices in the eurozone rose 2 percent on the year in August, a touch weaker than the 2.1 percent annual rate recorded the previous month.
Energy prices rose at a slower pace than in July, as did prices for services and industrial goods, the agency said.
In July, the unemployment rate held steady at 8.2 percent compared with June, though the number of people out of work in the eurozone fell by 72,000, to 13.3 million. Greece and Spain recorded the highest unemployment rates; the Czech Republic, Germany and Poland the lowest.
ECB officials concluded in July that the eurozone economy still needs “significant” stimulus from monetary policy to ensure inflation continues to climb, according to minutes of their late July policy meeting published this month.
Friday’s data and broader signs growth in the economy is slowing will likely reinforce that thinking. Officials in July felt that “monetary policy had to remain patient, prudent and persistent,” the ECB’s minutes said.
The central bank reiterated in June that it expects to phase out its bond-purchasing program by the end of 2018, although it has signaled that its policy rates – which include a minus-0.4 percent deposit rate – will remain unchanged at least through next summer.