In the euro area, the course seems to be set for a pick-up ineconomic momentum.

Unemployment in the 19-nation region remained at the lowestlevel in more than seven years in November as Germany reported asecond consecutive increase in industrial output and Frenchbusiness confidence improved. The data follow a survey ofpurchasing managers out last week that suggested the economy grewat the fastest pace since 2011 at the end of last year.

After months of muddling through, evidence is building that theeuro area has finally embarked on what European Central BankPresident Mario Draghi calls a “moderate but firming recovery.”Unemployment has been decreasing steadily, while a surge ineconomic confidence to the highest level in more than five yearssignals companies and households expect the recovery to continue ina year of political uncertainty.

“It is no wonder that consumer confidence is booming, as almost1 million people left unemployment in the euro zone in the pastyear,” said Bert Colijn, senior euro-area economist at ING Bank NVin Amsterdam. “As businesses are indicating that hiring will remainstrong in the coming months, it seems likely that job growth willcontinue to provide tailwinds for the economic recovery.”

Euro-area joblessness held at 9.8% in November, the EuropeanUnion's statistics office in Luxembourg said on Monday. That'sin line with economists' estimates in a Bloomberg survey. Thelowest unemployment rate in the region — 4.1% — was recorded inGermany, while joblessness in Spain was 19.2%. In Greece, 23.1%were out of work in September, the latest month for which data areavailable.

Despite these large differences, the region's unemployment ratehas worked off roughly half of the increase it saw since the startof the financial crisis in 2008, according to Marco Protopapa, aneconomist at JP Morgan Securities in London.

“Looking forward, the relevant surveys through December point tofurther gains in the labor market, which have been fairly alignedwith GDP growth over 2016,” he said in a note.

ECB President Mario Draghi has repeatedly urged governments toimplement reforms to reduce structural unemployment and boostgrowth potential, a call he also made last month after policymakers extended quantitative easing through the end of 2017. Butwith ruling parties in Germany, France and Netherlands trying tofend off threats from populist movements as they face generalelections in the coming months, action may be limited.

“The unemployment rate should continue to decline in the comingmonths,” said Holger Sandte, chief European analyst at NordeaMarkets in Copenhagen. Sentiments indicators “look pretty decentand unless politics gets in the way then the chances are not thatbad for the labor market.”

In Italy, unemployment unexpectedly increased to a 17-month highof 11.9% in November, the month before a referendum onconstitutional reform toppled the government.

The French economy is strengthening. The Bank of France'smanufacturing confidence index rose 1 point to 102 in December, thehighest since May 2011. The reading suggests the French economyexpanded 0.4% in the fourth quarter, up from 0.2% in the previousthree months, according to the central bank.

In Germany, Europe's largest economy, industrial productiongained 0.4% from October, when it advanced a revised 0.5%, theEconomy Ministry in Berlin said on Monday. A separate report fromthe Federal Statistics Office showed exports increased 3.9% inNovember, with imports up 3.5%.

“Germany is doing well — the economy is growing fast enough tobolster employment and slow enough to avoid inflationary tensions,”said Andreas Scheuerle, an economist at Dekabank in Frankfurt. “Ifit wasn't for the rest of the world, it would be in an optimalposition.”

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