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Eurozone jobless rate hits record

September 01, 2012

BRUSSELS, Aug 31: Jobless numbers across the eurozone hit a record 18 million in July, said grim new figures released on Friday as recession takes grip across the debt-stricken 17-nation currency area.

The 18,002,000 headline jobless figure released by Eurostat was the highest since records began in 1995 — and left the European Commission fretting over potential unrest on the streets of Europe’s capitals. An additional 88,000 people joining the ranks of the unemployed throughout July, the EU data agency said — well over 100 people per hour.

Upwardly-revised June data meant that the unemployment rate monitored by statisticians was unchanged at 11.3 per cent, but an estimated 25.254 million were listed as unemployed across the full EU, which also includes non-euro heavyweights Britain and Poland.

Coupled with annualised inflation rising to 2.6 per cent in August, according to a separate Eurostat release, the figures had analysts warning of ever-tighter household spending acting as a drag on governments’ hopes of recovery. Recalling an agreement by the EU leaders at their last summit to create “more dynamic labour markets,” a Commission spokesman said the jobless numbers were now at a “critical” level and would pose a “serious threat to social cohesion” without concerted action.

Focused on the desperate youth unemployment, particularly, in Spain and Greece, the spokesman said governments had to do everything possible to avoid a “lost generation.” The eurozone is faring far worse than its main international economic rivals. Japan’s unemployment rate was flat at 4.3 per cent in July even as the US rate rose to 8.3 per cent.

The news emerged as the International Labour Organisation warned of a “catastrophic” rise in unemployment, especially among the young, if debt-wracked Greece were to leave the eurozone or if the bloc were to split.

Ekkehard Ernst, a senior economist at the UN body, told a German daily that close to one in 10 would be without a job even in powerhouse Germany by 2014 — nearly twice the current level. At 5.5 per cent, today’s unemployment rate was much lower in Europe’s leading economy than the average, likewise neighbouring Austria and the Netherlands.

According to Christian Schulz of Berenberg bank, German jobs growth over recent months was already “past its peak.”

Unemployment in Germany rose for the fifth month in a row in August, with nearly three million out of work there, what ING economist Carsten Brzeski said was “a clear signal that the best times of the German labour market are over.” France has even higher numbers, upcoming August data seemingly sure to crash through the three-million mark.—AFP