The euro stumbled, dropping to session lows on Thursday after Eurostat reported that despite a welcome decline in Europe’s unemployment rate to 8.8%, the lowest level in 9 years, Eurozone inflation missed expectations, rising from 1.4% to 1.5%, below the 1.6% consensus expectations, reminding the ECB that Phillips curves around the globe remain broken and that its intention to taper QE and tighten monetary policy may yet be derailed.

Looking at the main components of euro area inflation, energy is expected to have the highest annual rate in November (4.7%, compared with 3.0% in October), followed by food, alcohol & tobacco (2.2%, compared with 2.3% in October), services (1.2%, stable compared with October) and non-energy industrial goods (0.4%, stable compared with October).

European core inflation (excluding food, energy and tobacco) remained unchanged at 0.9% in November, below the 1% median estimate by economists. The euro traded lower after the report, and was at $1.1829 at 11:44 a.m in Frankfurt.

Indeed, as Bloomberg reports, the latest price data “outline the dilemma facing the ECB.” and even with the region’s economy set for the fastest growth in a decade and the most broad-based expansion since 1997, a sustained price recovery remains some way off. While policy makers have acknowledged that this development warrants less additional monetary support, ECB President Mario Draghi has advocated a “patient and persistent” approach to exiting the central bank’s stimulus program.

Despite inflation consistently undershooting expectations, policy makers have expressed confidence that economic growth and falling unemployment will eventually feed through to prices. “The solid and broad-based economic recovery in the euro area is continuing,” ECB Executive Board member Peter Praet said on Thursday in Brussels. “The breadth of the expansion is notable.” Despite

“All indications are that the recovery will continue for longer, and that would put pressure on wages and prices going forward,” Vitor Constancio said in an interview with Bloomberg Television on Wednesday. “It’s a gradual process, but we see it going in that direction.”

Governing Council members Jens Weidmann and Klaas Knot on Wednesday called for a more a decisive acknowledgment of the strengthening of the economy. “Evidence is mounting the economic outlook will be at least as good as previously forecast, if not even better,” Bundesbank President Weidmann said. “This development should continue for a while.”

Still the latest data means that when the ECB’s Governing Council next meets on Dec. 14, it will be faced once again with a picture of solid economic growth and subdued prices pressures. Policy makers announced in October that they will halve its current monthly pace of bond buying starting January and running until at least September.

“Absent deflation risk, a full phasing-out of net asset purchases from September 2018 onward is warranted,” Knot said in London.

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