© Reuters. A vendor wearing a protective face mask waits for customers at © Reuters. A vendor wearing a protective face mask waits for customers at "Naschmarkt" market amid growing coronavirus disease (COVID-19) in Vienna

BRUSSELS (Reuters) - Euro zone consumer prices fell in August, against market expectations of a small increase, pulled down by a sharp drop in energy prices, the European Union's statistics office Eurostat said in a flash estimate

Eurostat said consumer prices in the 19 countries sharing the euro fell 0.4% month-on-month for a 0.2 year-on-year decline. Economists polled by Reuters had expected a 0.2% year-on-year rise in August. The last time prices fell year-on-year in the euro zone was in May 2016 when they dropped by 0.1%.

Energy prices tumbled 7.8% year-on-year in August after a 8.4% fall in July. Prices of non-industrial goods also declined, by 0.1% after a 1.6% increase in July.

Without the volatile energy and also often changing unprocessed food prices - what the European Central Bank calls core inflation - prices fell 0.4% month-on-month for a 0.6% annual rise. Economists polled by Reuters had expected a much higher 1.1% year-on-year gain.

An even narrower measure excluding also alcohol and tobacco prices that market economists watch closely fell 0.5% month-on-month for a 0.4% year-on-year increase, barely half of what analysts had expected.

The ECB wants to keep inflation below, but close to 2% over the medium term.

Separately, euro unemployment was slightly lower than expected at 7.9% in July, up from 7.7% in June. Economists polled by Reuters had expected an increase to 8.0% of the workforce.

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