According to Euro-stat, the unemployment rate in the 18 member euro-area was 12 percent, the same level since October while the unemployment rate in the 28 member European Union bloc fell to 10.7 percent in December from 10.8 percent in November.
Meanwhile, the inflation rate in the euro-area came in at 0.7 percent in January, a new record low and below the 0.8 percent level in December, renewing concerns about persisting deflation in the euro-area.
In November the European Central Bank (ECB) lowered their primary interest rate to a record low 0.25 percent to move against a deflationary economic environment.
Yet the latest inflation reading today shows that inflation is still in decline and creating more job growth in Europe remains a fundamental concern.
Following the Federal Reserve decision to taper their quantitative easing program in 2014 at a pace of $10 billion per month, liquidity inflows to emerging markets has pulled back.
David Woo, Bank of America Merrill Lynch- Head of Global Rates, said on CNBC’s Squawk Box this morning that the market underestimated the impact of less liquidity in the market due to the Fed’s decision to taper their quantitative easing (QE) program.
“People thought tapering was going to be a non-event. I think that was where the market was extremely complacent because if QE was going to play such a big role, I think the market simply was under-estimating what it means when liquidity is finally being withdrawn” Woo said.
“I think the markets are finally now waking up to what this actually means” Woo added later.
Latest U.S. economic data released this morning from the Commerce Department showed that U.S. spending increased 0.4 percent in December after an upwardly revised 0.6 percent gain in November.
U.S. equities are off to their worst start of the year since 2009.
The Dow has risen only two times in the past eight trading sessions.