What's going on?

In May, the unemployment rate in the eurozone (i.e. the countries that use the euro as their currency) fell to its lowest level since July 2011 � it�s now down to 10.1%. But that�s still more than double the rate in the US. Also, weaker countries in Europe are doing a lot worse than the �average.�

What does this mean?

Europe�s economy seems to be undergoing a moderate improvement. First quarter growth was strong and, while the second quarter isn�t expected to be as strong, there have been enough positive economic data releases to suggest that it too will be encouraging. May was the third consecutive month of a fall in the unemployment rate � so, that adds to the positive sentiment. Of course, the elephant in the room is the uncertainty created by Britain�s vote to leave the European Union � and that�s expected to dent the economy at least somewhat over the coming months. It�s unclear how big the dent will be and for how long it will persist.

Why should I care?

The bigger picture: The employment situations differ greatly between European countries. In Germany, the unemployment rate is 4.2% but in Spain it�s nearly 20%. The disparity is going down (Spain�s unemployment rate has improved significantly in the past year, for example) but, obviously, there�s still quite a large gap. So the �average,� in many respects, isn�t really a good reflection of reality.

For you personally: In theory, unemployment first comes down and then wages start going up. In the US, wages are rising at their highest rate since the financial crisis (which, by the way, isn�t saying much: wage growth is still well below the historical average). That�s partly because the US unemployment rate is so low (4.1%). When there are fewer spare workers available, the firms have to pay more in order to attract employees. Looking at Europe as a whole, that�s not happening yet as 10% is still quite a high unemployment rate.