Unemployment in the 21-member eurozone fell to 6.1% in January, Eurostat reported, down from 6.2% in December 2025 and 6.3% a year earlier.
Economists had expected the rate to remain unchanged at 6.2%.
The figure translates to 10.77 million people without work across the bloc.
Excluding Bulgaria, the newest member of the currency bloc, the eurozone’s 20 original members also saw an improvement, even though the jobless rate came in at 6.2%, unchanged.
But the overall number of unemployed is declining, signalling a healthier labour market.
Across the wider European Union, unemployment dropped to 5.8%, down from 5.9% in December and 6% in January 2025.
Month-on-month, the number of unemployed fell by 185,000 in the EU and 184,000 in the eurozone.
Among the bloc’s largest economies, Germany and the Netherlands recorded the lowest unemployment rates at 4% each.
Spain (9.8%), France (7.7%) and Italy (5.1%) remained at the higher end of the spectrum.
Youth unemployment also eased slightly, with the EU rate falling to 15.1% from 15.2%, and the eurozone rate dipping to 14.8% from 15%.
Recent economic indicators suggest the EU economy is more resilient than previously expected.
Eurostat’s preliminary estimates show GDP growth of 1.5% in the euro area and 1.6% across the EU in 2025, underpinned by robust performance in key sectors.
UK unemployment hits post-pandemic peak
By contrast, the UK saw unemployment rise to 5.2%, a five-year high, overtaking Italy’s 5.1%.
Danni Hewson, head of financial analysis at AJ Bell, called it an unexpected long-term planning result.
“Businesses have been crystal clear that government policies increasing labour costs led them to pause hiring plans and may have accelerated changes with long-term impacts on job creation.”
Analysts also highlight the potential impact of artificial intelligence on youth employment.
Hewson added that “integrating AI into businesses to boost productivity is a positive step, but for young people already struggling to get their first taste of work, AI could reduce entry-level opportunities.”
AI not yet replacing jobs in Europe, says ECB
Artificial intelligence has not caused widespread job losses in Europe, the European Central Bank said on Wednesday in a blog post.
According to the ECB, firms using AI heavily were 4% more likely to hire staff than those that do not, with many adding workers to implement AI tools and expand production.
While the long-term effects are uncertain, the ECB said AI’s impact on jobs so far is either neutral or slightly positive.
