European Unemployment Remained at Record Low of 7.2% in May

European unemployment remained at a record low in May, reinforcing the European Central Bank's concern that soaring prices may fuel bigger wage demands, reported The Bloomberg.

The jobless rate in the 15-nation euro area remained at 7.2 percent, the European Union statistics office in Luxembourg said today. That is the lowest rate since the data series began in 1993.

The ECB has signaled it may increase the benchmark interest rate to 4.25 percent this week to tackle inflation that is running at the fastest pace in more than 16 years. ECB President Jean-Claude Trichet said last week he is ``particularly concerned'' that current inflation rates may become ``entrenched in private inflation expectations and lead to second-round effects.''

``The ECB have been pretty consistent in saying the risks on the growth side were probably less significant than on the inflation side,'' Jean-Michel Six, chief European economist at Standard & Poor's, said in a interview with Bloomberg Television. The ECB ``is not only talking the talk, they also are delivering as far as interest-rate hikes are concerned.''

Wage growth in Europe accelerated to 3.3 percent in the first quarter, the most since the second quarter of 2003, according to figures published June 13. That compared with a 2.9 percent pace in the previous three months.