Inflation in the eurozone dropped again in January to 8.5%. The decline marks the third straight month of the downward trend since inflation peaked at 10.7% in October.

In December, the number had been 9.2%.

However, analysts warned that the numbers may offer little relief to consumers as prices for goods remained high.

Although the shake-up to the prices of food and fuel driven by Russia's invasion of Ukraine has leveled off on a larger scale, that has had little effect thus far on energy and grocery bills.

Prices for food have risen some 14.1%, while energy prices rose 17.2% year-over-year.

Europe has managed, however, to avert an even worse energy crisis that threatened to engulf the continent last spring due to reliance on Russian gas. This is due partly to a successful campaign to secure new energy partners as well as a mild winter that reduced the need for heating.

Core inflation remains steady

Despite this, core inflation, which doesn't include the volatile food and energy markets, held steady at 5.2% for January as prices increased for items such as clothing, appliances, cars and computers.

The European Central Bank is expected to announce another rate hike on Thursday in an effort to bring inflation closer to its 2% target, though this will continue to make it more expensive for consumers to borrow money.

Unemployment stays low

At the same time, unemployment across Europe sunk to record lows. Official statistics agency Eurostat reported that the unemployment rate in January was the same as December, 6.2%.

This is the lowest it has been since the introduction of the euro currency in 2002. According to Eurostat, there are some 11.05 million people unemployed throughout Europe, which is 500,000 fewer than there were in December 2021.

es/sms (AP, Reuters)