Inflation unchanged, unemployment steady

EURO-AREA inflation remained unchanged in August and unemployment held steady for a second month in July as economic growth in the region slowed amid a persistent sovereign debt crisis.

The inflation rate remained at 2.5% after falling to that level in July, the European Union’s statistics office in Luxembourg said yesterday in an initial estimate. The seasonally adjusted jobless rate remained at 10%, a separate report showed. Eurostat revised March, May and June unemployment up to 10% from 9.9%.

Europe’s economy cooled more than economists forecast in the second quarter and economic confidence plunged in August, suggesting companies may find it more difficult to pass on higher costs and boost hiring. Economic and Monetary Affairs Commissioner Olli Rehn indicated this week that the EU may reduce its 2011 growth forecast from 1.6% on concerns that financial turbulence could spill into the broader economy.