It’s not a good day for economic news in the eurozone.
For starters, deflation is here.
Europe’s consumer price inflation dropped below zero for the first time since 2009. It was pushed over the line by collapsing oil prices, but extremely weak demand means European inflation was already looking feeble.
But there were two more figures this morning that might demonstrate the eurozone’s fundamental problem even better.
Germany’s adjusted unemployment dropped to a record low at 6.5% (Germany’s own measure is at 5%), and Italy’s soared to a record high at 13.4%.
When it comes to jobs, the two countries’ economies are fundamentally detached and headed in different directions.
Here’s how that looks:
It’s amazing to remember that back in 2008, the German and Italian unemployment rates were basically in the same place.
In fact, for the previous decade, Germany’s was higher a lot of the time.
This sort of massive difference is the flaw at the heart of a currency union.
What suits Germany doesn’t suit Italy, and one of them will always be upset or disadvantaged by whatever policies politicians and central bankers agree to.
And that’s probably even more depressing that the deflation figure today.