Euro area's unemployment approaching high structural level

Euro area's unemployment continues its decline rapidly nearing high structural level. The latest print for the month of October shows an unemployment rate of 10.7%, which is not far from the 9.9% structural rate estimate.

UK and US leaves the experience that when the rate approaches its structural level, the pressure on wages would move upwards simultaneously. 

"We expect the unemployment rate to reach this level at end-2016, but as seen in the US, the structural unemployment rate could be lowered towards pre-crisis levels of 9.0% when the actual unemployment rate approaches it", says Danske Bank in a research note.