|Definition||Is a closely watched reading across the globe that measures the levels of unemployed workers in certain economies; this reading is released two months after the reported month by Eurostat.|
The Unemployment rate is major indictor that measures the health of an economy, usually when the GDP reading expands the unemployment rates narrow down as sectors in the economy employ more workers to continue expanding. But on the other hand, when growth contracts levels of unemployment levels start to escalate it is because companies are starting to terminate jobs in order to cut their expenses.
However, when the Unemployment rates surge it puts more pressure on the economy, because people start easing down on their spending levels as their household income's narrow down and vice versa, when the unemployment levels narrow down. A surge in unemployment could steal away all the confidence in the economy resulting in more issues, which leaves Central Banks in a tight situation where interventions will be needed to help them out.
The Unemployment rate has a major effect on currency markets because as mentioned earlier, it measures the health of a certain economy and clarifies the extent to which the economy is still struggling.
Although, Unemployment Rates do not move rapidly as much as other indicators do, it is mostly do to the sectors in the economy that won't terminate jobs until they have struggled for some time from an ongoing crisis.
|Best Case Scenario||The unemployment rate in the EU Zone is projected to rise as the best case scenario would be if the rate comes in lower than expectations as this means that despite the recession they are currently in, companies eased the pace of laying off employees, and this would help growth pick up pace since consumers will have money coming in to spend in the nation.|
|Worst Case Scenario||If the unemployment rate comes in higher than projections or inline with the reading this means the worst case scenario would be growth prospects are undermined as Europeans lack money to spend in the economy, which means that the ECB will continue applying quantitative easing methods to stimulate economic growth as they are already using 60 billion on buying euro dominated bonds.|