Euro zone unemployment hits 10-year high, recovery to take time

Published Friday July 3rd, 2009
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Source: The Daily Gleaner

LONDON - Unemployment in the 16 countries that use the euro spiked to a 10-year high in May, reinforcing concerns that any recovery will take time with more than 15 million people out of work.

Eurostat, the EU's statistics office, said the seasonally-adjusted unemployment rate for the euro zone in May stood at 9.5 per cent of the work force, up from April's 9.3 per cent.

It said just over 15 million people were unemployed in May, up 273,000 on April.

The increase was expected in the markets in light of the ongoing fall in output across Europe - in the first quarter of 2009, the euro zone economy saw output plunge by 2.5 per cent as the global recession hit the industrial sector in particular.

Spain is the euro zone's biggest casualty. Its jobless rate rose to 18.7 per cent in May from 18 per cent in April.

The lowest EU unemployment rate was in the Netherlands where only 3.2 per cent of the working population were without a job in May, and Austria, where only 4.3 per cent were jobless.

The unemployment rate in Germany, Europe's biggest economy, was unchanged at 7.7 per cent in May.

Unemployment is a lagging indicator, so jobless numbers will likely rise for a while even when the recession officially ends.

Recent economic releases have stoked hopes that the euro zone may start to see some sort of recovery towards the end of the year but that high unemployment levels will continue to weigh on consumption and sentiment.

 

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