European economy on upswing?

LONDON — Mention it quietly, but there were rare hopeful signs for Europe's struggling economy on Friday.

Three pieces of economic news for the 17 European Union countries that use the euro were all slightly better than hoped – in sharp contrast to some of the grim days the eurozone has witnessed over the last three years of its crisis over too much debt.

Unemployment was lower than feared in December, though still high at 11.7 percent; a survey raised hopes of some growth in the manufacturing sector; and inflation unexpectedly fell, easing the headwinds on hard-pressed consumers and raising speculation of more help from the European Central Bank.

No one is in any doubt though that the eurozone's economy, which is currently stuck in recession, has a long way to go before it can even get out of intensive care let alone on the road to full recovery. Debt levels remain high, governments continue to cut services and raise taxes and communities across the region are suffering as the region struggles to solve the crisis that's threatened the euro's very survival.

In that context, any bit of good news is welcomed with open arms and potentially could give the eurozone some breathing space as it tries to fix its myriad of problems.

The euro and European stock markets tracked higher after the figures' release.

It's not as bad as it was and that's probably the best one can say, which is a good thing, but it doesn't mean happy days are near, said Marc Ostwald, market strategist at Monument Securities.

One of the eurozone's problems remains sky-high unemployment, with 18.7 million out of work, according to Friday figures from Eurostat, the EU's statistics office. In 2012 as a whole, eurozone unemployment rose by nearly 1.8 million.

Though the 11.7 percent unemployment rate for December was below market expectations for a rise to 11.9 percent, it still remains the highest level since the euro was launched 14 years ago, as November's original estimate of 11.8 percent was revised down.

James Ashley, senior European economist at RBC Capital Markets, said the figures are notably better than the consensus and noted that the 16,000 monthly increase was the smallest since unemployment started rising again in May 2011.