(Alliance News) - Inflation in the eurozone eased to 1.9% in May, falling below the European Central Bank's 2% target for the first time since September.

According to a flash estimate from Eurostat on Tuesday, annual consumer price inflation is estimated to have been 1.9% in May, down from 2.2% in April.

The deceleration, mainly driven by slower growth in services prices and ongoing energy deflation, came below the 2.0% FXStreet-cited market consensus.

Prices for services rose 3.2% annually in May, slowing from 4.0% in April. Energy prices continued to fall, down 3.6% year-on-year for a second consecutive month. However, food, alcohol & tobacco prices rose 3.3%, accelerating from 3.0% the previous month.

Core inflation, which excludes energy, unprocessed food, alcohol & tobacco, eased to 2.3% in May from 2.7% in April.

The flash reading comes ahead of the European Central Bank's interest rate decision on Thursday, with markets widely expecting a 25 basis point cut.

Separate data showed the euro area unemployment rate edged down to 6.2% in April from 6.3% in March and 6.4% a year ago.

The EU-wide unemployment rate was 5.9% in April, unchanged from March and down from 6.0% in April 2024.

Youth unemployment in the eurozone also improved, with the rate falling to 14.4% in April from 14.8% in March. The total number of jobless people in the euro area fell by 207,000 month-on-month to 10.7 million.

The full inflation dataset for May will be released on June 18.

By Eva Castanedo, Alliance News reporter

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