The eurozone crowned a week of steadily improving economic data on Friday with inflation almost down to the European Central Bank's (ECB) medium-term target, falling to 2.0 percent in January after overshooting for more than two years, EU data showed.
Marking good news for leaders of the 17-state currency area preparing for next week's European Union summit, the drop from 2.2 percent in December took the measure of annual price rises to the lowest level since 1.9 percent in November 2010.
Separately, chronic and rising unemployment across the eurozone appeared to stabilise in December at a rate of 11.7 percent.
However, the latest EU data still showed almost 19 million people without work in what analysts warned remains a major challenge to political leaders struggling to generate meaningful growth.
The ECB has established a medium-term inflation target of below, but close to, 2.0 percent.
The Eurostat data agency's flash estimate approached that threshold owing to easing pressure on energy prices, which rose by 3.9 percent in January, down from 5.2 percent in December.
Food, alcohol and tobacco inflation was also stable, at 3.2 percent, with slight drops in price rises for services (1.7 percent compared with 1.8 percent in December) and non-energy industrial goods (0.8 percent compared with 1.0 percent in December).
Eurozone inflation has been falling since August and benchmark Germany posted a rate of 2.0 percent in December,although major markets in Italy and Spain each still posted rates well above the eurozone average.
Analyst Martin van Vliet of ING Bank said the data suggests that inflation "is not a threat in the foreseeable future" with the eurozone rate "set to continue its gradual descent, with slower energy price inflation expected to push the headline rate well below two percent around the middle of this year."
The unemployment drag on the economy is a contributor, Eurostat putting the unemployment rate at 11.7 percent, the same level as in November, after revising that month's figure down from 11.8 percent.
It still amounted to a 20th rise in a row, with the out-of-work numbers for the full 27-member EU, which includes countries such as Britain and Poland, just a little less than 26 million.
Compared with figures a year earlier, the eurozone has shed 1.796 million jobs.
Divergences in terms of economic performance within the bloc also remain pronounced, the lowest unemployment rates again recorded in the the wealthier north, with Austria on 4.3 percent, Germany and Luxembourg each on 5.3 percent and the Netherlands on 5.8 percent.
Greece and Spain continue to log by far the highest rates, at 26.8 percent in October and 26.1 percent in December, respectively.
Using seasonally-adjusted Eurostat calculations for comparative purposes with major international rivals, in December 2012, the unemployment rate in the United States was 7.8 percent. In Japan it was 4.1 percent in November 2012.
"Unfortunately, despite the lack of change in the overall jobless rate, the downturn in the eurozone labour market does not appear to be over yet," said van Vliet. "We would still expect the jobless rate to breach 12 percent later this year."