Eurozone unemployment eases to four-year low in March

Eurozone unemployment slipped to the lowest level in four years in March, easing to 8.1 percent of the workforce from 8.2 percent in the previous month, according to the EU's Eurostat data agency on Wednesday.

The decline, which was based on seasonally adjusted data, beat private economists' expectations for unemployment in the 12 nations sharing the single European currency to hold steady at 8.2 percent of the workforce.

The March rate means that joblessness in the eurozone has not been as low since April 2002.

Unemployment in the eurozone has drifted lower over the past year as the bloc's economy has gradually gathered steam. In March 2005, unemployment stood at 8.8 percent

In the 25-nation European Union, unemployment held steady in March at 8.4 percent compared to February and fell from 8.9 percent in March 2005.

Eurostat estimated that in March this year 11.8 million men and women were out of a job in the eurozone and 18.2 million in the EU.

Economists said that the March decline in eurozone unemployment bode well for domestic demand because it was likely to give consumers more confidence about spending.

"The eurozone unemployment figures for March supported other evidence suggesting that the conditions are coming together for the European economic recovery to spread from industry to the household sector," Capital Economics economist Jonathan Loynes said.

Loynes said that the fall was driven by a four consecutive declines in Germany, the eurozone's biggest economy, although unemployment has been less impressive in France, Italy and Spain.

Global Insight economist Howard Archer said: "Higher employment is critical if consumer spending is to strengthen significantly across the eurozone on a sustainable basis, thereby enabling the region's economic upturn to broaden and deepen."

He also said that falling unemployment showed that companies were hiring more workers to meet improving demand.

"It currently appears that increased business is leading to a growing number of eurozone companies taking on extra workers to meet their commitments," he said.

"This is despite the fact that eurozone companies are still keen wherever possible to keep their labour forces as tight as possible due to squeezed margins and very strong competition," he added.