New record high for euro area unemployment
by Daniel Mason
31 August 2012
Eurozone unemployment stood at 11.3 per cent in July, meaning that just over 18 million people were out of work across the 17 countries of the single currency area, figures published today by Eurostat showed. It is the highest rate of unemployment since the introduction of the euro.
The European Commission's statistics office also revised June's jobless rate up from its original estimate of 11.2 per cent to 11.3 per cent. Although the revision means the official rate was the same in both months, the figures revealed that an additional 88,000 people were out of work in July compared with June.
In the 27 member states of the European Union as a whole, unemployment was stable at 10.4 per cent in July. Youth unemployment was more than 22 per cent in both the eurozone and the wider EU.
Spain saw its total jobless rate increase from 24.9 per cent to 25.1 per cent, the highest in the EU. The latest data for Greece, from May, showed unemployment at 23.1 per cent. Meanwhile the lowest unemployment figures were 4.5 per cent in Austria, 5.3 per cent in the Netherlands, and 5.5 per cent in both Germany and Luxembourg.
In a separate report, Eurostat said that eurozone inflation was expected to be 2.6 per cent in August – up from 2.4 per cent the previous month, marking the first rise in inflation in a year.
"The rise in eurozone unemployment in July, coupled with the pick-up in inflation in August, supports the view that the downturn in household spending will intensify in the second half of this year," said Ben May, European economist at Capital Economics. He said he expected euro area unemployment to continue to rise but that inflation should resume its downward trend for the rest of this year.
On the unemployment figures, ING economist Peter Vanden Houte, quoted by The Guardian, said the continued divergence between the eurozone core and periphery was "striking". "For the stability of the eurozone, this is an unsustainable development," he said, adding that the increase in inflation was "probably due to the rise in oil prices and to a lesser extend higher food prices over the summer months".
Similarly Tim Ohlenburg, senior economist at the Centre for Economics and Business Research, said the divergence between eurozone countries was more worrying than the overall level of unemployment.
"Within a country, transfers between regions would help to share the adjustment burden, but no such mechanism exists in the eurozone apart from ad-hoc bail-outs," he said. "More needs to be done or the gap between strong and weak economies may become so great that it tears the currency union apart."
The president of the Socialists and Democrats group in the European Parliament, Hannes Swoboda said: "We must not get used to these excruciatingly high levels of unemployment. We have been witnessing constant, creeping increases in unemployment – and especially youth unemployment – for years now.
"Enough is enough – the commission must now develop and present a detailed roadmap on how to sustainably lower the rate of unemployment by creating job and sustainable employment in the eurozone."
United Kingdom Independence Party leader Nigel Farage said the figures made for "harrowing reading". "The leaders of the EU are at a loss to explain what is happening, as more lose their jobs and prices rise," he said.
"That is simply because they cannot accept that it is their own policies that have created this human nightmare. Unless and until they accept that it is their own errors that have caused it, then we and the millions of people across the European continent will continue to suffer."
The European Commission's statistics office also revised June's jobless rate up from its original estimate of 11.2 per cent to 11.3 per cent. Although the revision means the official rate was the same in both months, the figures revealed that an additional 88,000 people were out of work in July compared with June.
In the 27 member states of the European Union as a whole, unemployment was stable at 10.4 per cent in July. Youth unemployment was more than 22 per cent in both the eurozone and the wider EU.
Spain saw its total jobless rate increase from 24.9 per cent to 25.1 per cent, the highest in the EU. The latest data for Greece, from May, showed unemployment at 23.1 per cent. Meanwhile the lowest unemployment figures were 4.5 per cent in Austria, 5.3 per cent in the Netherlands, and 5.5 per cent in both Germany and Luxembourg.
In a separate report, Eurostat said that eurozone inflation was expected to be 2.6 per cent in August – up from 2.4 per cent the previous month, marking the first rise in inflation in a year.
"The rise in eurozone unemployment in July, coupled with the pick-up in inflation in August, supports the view that the downturn in household spending will intensify in the second half of this year," said Ben May, European economist at Capital Economics. He said he expected euro area unemployment to continue to rise but that inflation should resume its downward trend for the rest of this year.
On the unemployment figures, ING economist Peter Vanden Houte, quoted by The Guardian, said the continued divergence between the eurozone core and periphery was "striking". "For the stability of the eurozone, this is an unsustainable development," he said, adding that the increase in inflation was "probably due to the rise in oil prices and to a lesser extend higher food prices over the summer months".
Similarly Tim Ohlenburg, senior economist at the Centre for Economics and Business Research, said the divergence between eurozone countries was more worrying than the overall level of unemployment.
"Within a country, transfers between regions would help to share the adjustment burden, but no such mechanism exists in the eurozone apart from ad-hoc bail-outs," he said. "More needs to be done or the gap between strong and weak economies may become so great that it tears the currency union apart."
The president of the Socialists and Democrats group in the European Parliament, Hannes Swoboda said: "We must not get used to these excruciatingly high levels of unemployment. We have been witnessing constant, creeping increases in unemployment – and especially youth unemployment – for years now.
"Enough is enough – the commission must now develop and present a detailed roadmap on how to sustainably lower the rate of unemployment by creating job and sustainable employment in the eurozone."
United Kingdom Independence Party leader Nigel Farage said the figures made for "harrowing reading". "The leaders of the EU are at a loss to explain what is happening, as more lose their jobs and prices rise," he said.
"That is simply because they cannot accept that it is their own policies that have created this human nightmare. Unless and until they accept that it is their own errors that have caused it, then we and the millions of people across the European continent will continue to suffer."
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COMMENTS
Who remembers the Lisbon strategy - also known as the Lisbon agenda or Lisbon process? It's goal, to make the European Union "the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion".
Anoneumouse - Cumbria, UK
The so-called EU and eurozone have no relation whatever to financial wellbeing of any kind, for anyone. They are solely for the purpose of destroying individual nation states. All those supporting these twin abominations are wholly eaten up by political dementia. Until this totalitarian psychosis is totally destroyed, there will be no peace or prosperity anywhere.
Jeremy Ross - London, England
