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Grim record as eurozone jobless soars to 18.2m

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The FINANCAL — Jobless numbers hit a grim record of 18.2 million across the eurozone in August, showing an annual rise of well over two million for the recession-stricken single currency area.

 

The FINANCAL — Jobless numbers hit a grim record of 18.2 million across the eurozone in August, showing an annual rise of well over two million for the recession-stricken single currency area.

After a sharp revision to July figures, official European Union data on Monday highlighted the damage caused by the debt crisis and left analysts tipping many more job losses ahead as the economy slumps.

The gloomy 18,196,000 headline unemployment figure for August released by Eurostat was the highest since records began in 1995 and equated to a massive jump of 2,144,000 in the last 12 months.

The data also made clear how much worse the eurozone is faring relative to the rest of the 27-state European Union, a single market which includes major economies Britain and Poland.

"Compared with August 2011, unemployment rose by 2.170 million in the EU 27 and by 2.144 million in the euro area," Eurostat said.

That almost the entire annual increase for the full bloc was accounted for by the gain in the eurozone alone showed a need for urgent action, the European Commission.

Spokesman Jonathan Todd said the EU executive was concerned that "member states' employment and social situations are starting to diverge," and that the EU had to now "give priority to job creation" measures.

Officials had previously warned that eurozone jobless levels were becoming "critical" and would pose a serious threat to social cohesion without action.

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In recent weeks, Spain, Portugal and Greece have all faced mounting street protests against government austerity programmes, with the fresh tensions stoking calls for more autonomy or even independence, as in Catalonia.

In a statement, Eurostat said the August unemployment rate of 11.4 percent was stable compared to July, with just a 34,000 increase.

However, the July figures were revised radically upwards to add 160,000 to the jobless count for that month, giving the same 11.4 percent unemployment rate, a Eurostat spokesman said.

There were some 25,466,000 out of work in the full EU 27, giving an unemployment rate of 10.5 percent, flat with July which was revised up to the same figure from the initially given 10.4 percent.

The eurozone is faring far worse than its main international economic rivals. As EUbusiness reported, Japan's unemployment rate was 4.1 percent in August according to Eurostat, which uses complicated data modelling to draw comparisons, while the United States was at 8.1 percent.

Spain had the highest unemployment rate in August, 25.1 percent for all adults, and 52.9 percent for under-25s.

Greece posted the highest youth unemployment rate — 55.4 percent — and was only narrowly behind Spain overall with 24.4 percent of adults out of work.

Germany's rate was 5.5 percent, with neighbouring Austria recording the lowest at 4.5 percent.

Analyst Howard Archer of London-based IHS Global Insight said the likelihood, after a 16th successive monthly rise, was that eurozone unemployment is headed "significantly higher."

He said that "there looks to be a very real danger that the eurozone unemployment rate could reach 12 percent in 2013."

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The eurozone economy shrank by 0.2 percent between April and June, after flat growth in the first quarter, and analysts see a recession for the third, with no recovery in sight.

September's Purchasing Managers Index (PMI), a survey of thousands of eurozone manufacturers compiled by Markit research firm and seen as a reliable growth indicator, marked a 14th negative month in a row.

"The rise in eurozone unemployment in August, coupled with the still low level of the manufacturing PMI, adds to the evidence that the region is in a deepening and broadening recession," said Jennifer McKeown of Capital Economics.

 

 

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