BRUSSELS (Reuters) - Euro zone unemployment rate fell to 6.5% in March, the European Union's statistics office Eurostat said, a decline that points to a further tightening of the labour market an spells more trouble for the European Central Bank in fighting inflation.
The March unemployment rate in the 20 countries using the euro is lower than expected by economists polled by Reuters, who forecast an rate unchanged from February at 6.6%.
Eurostat said the number of people without jobs fell to 11.01 million in March from 11.131 mln in February.
The tightest labour market was in Germany, where the jobless rate fell to 2.8% of the workforce from 2.9% in February, which is likely to have helped German trade unions negotiate substantial pay rises.
The higher wages, however, in Germany and elsewhere, are likely to make much harder the ECB's job of bringing down inflation, which in April run at 7.0% year-on-year against the bank's target of 2.0%.