Eurozone unemployment rate hits new high
by Daniel Mason
Eurozone unemployment rose in February to its highest level since the introduction of the euro, with a total of 17.134 million people out of work in the 17 countries that use the single currency.
The jobless rate increased by 0.1 per cent to 10.8 per cent compared with the previous month. February was the tenth month in a row to see an increase in unemployment. Meanwhile the eurozone's youth unemployment crisis worsened, with the jobless rate for under-25s soaring to 21.5 per cent, up from 20.5 per cent.
Both overall unemployment and youth unemployment were highest in Spain, at 23.6 per cent and 50.5 per cent respectively, according to Eurostat. There was no data for Greece, which posted a jobless rate of 21 per cent in December, while in February unemployment in Portugal rose to 15 per cent. Austria posted the lowest jobless rate of 4.2 per cent while in Germany the rate was stable at 5.7 per cent.
It followed more bad news for the eurozone economy, with the purchasing manager's index earlier showing that manufacturing also slowed in February. The index came in at 47.7, marking the eighth month in row in which output has shrunk. In the eurozone, only Ireland and Austria saw a boost in manufacturing.
Howard Archer, chief European economist at IHS Global Insight, warned that he expected the picture to worsen still further. "With the eurozone likely having suffered a further gross domestic product decline in the first quarter of 2012 and in danger of further contraction in the second quarter, and with business confidence still generally weak despite largely coming off the lows at the end of 2011, the likelihood is that the eurozone unemployment rate will move significantly higher," he said.
Meanwhile Jennifer McKeown, senior European economist at Capital Economics, noted the "sharp contrast" in the data coming out of the eurozone and the United States, where the jobless rate has fallen 1.7 percentage points from its October 2009 peak. In the same period, eurozone unemployment has increased 0.8 percentage points.
"Soaring unemployment is clearly adding to the pressure on household incomes from aggressive fiscal tightening in the region's periphery," she said. "But even in Germany, survey measures of hiring point to a downturn to come. And with inflation remaining stubbornly high throughout the euro-zone, there is very little hope of a consumer recovery." On Friday it was revealed that inflation stood 2.6 per cent in March, a smaller decrease compared with February than economists had predicted.
Unemployment was also up in the wider European Union, from 10.1 per cent in January to 10.2 per cent in February, meaning that there were 24.55 million people out of work across the 27 member states.
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