Eurozone exits deflation, unemployment stable

The eurozone exited four months of deflation in April, official data showed on Thursday, reversing a dangerous bout of declining prices and reviving hopes of economic recovery in Europe.

Inflation in the 19-nation single currency bloc hit zero percent in April, after a drop of 0.1 percent in March, with low energy costs still impacting the cost of living, the EU statistics agency Eurostat said.

The news will be welcomed at the European Central Bank, which in March launched a historic round of monetary stimulus to fight falling prices in the eurozone.

Economists fear deflation almost as much as rampant inflation because shoppers tend to put off purchases in the belief they may be cheaper in the future. This leads to a spiral of ever weaker demand, slowing the economy and pushing up unemployment.

Unemployment remained stable at 11.3 percent in March compared to February, Eurostat said, which was down from 11.7 percent a year before.

As usual, the level of joblessness varied widely across the across the eurozone.

Unemployment in powerhouse Germany was unchanged at 4.7 percent, the lowest rate in the currency bloc.

The highest rate was in debt-stricken Greece, at 25.7 percent in January, the latest data available, which was slightly lower than 25.9 percent a month earlier.

Youth unemployment in Greece and Spain stood at a huge but lower 50.1 percent in both countries.

Worryingly, Italy, the eurozone's third biggest economy, saw joblessness continue to rise to 13 percent, up from 12.7 percent in February.

EU-wide, unemployment in the 28 member states was also unchanged at 9.8 percent.

A week ahead of a general election, Britain was at a low 5.5 percent in January, a huge drop from 6.9 percent a year before in what could only be good news for incumbent Prime Minister David Cameron.