Jobless rate in eurozone soars to highest since set-up of euro
Source: Agencies |
March 2, 2012, Friday
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Print Edition
Print Edition
MASS unemployment in Greece and Spain, where nearly half of those under 25 are out of work, sent the jobless rate across the 17-nation eurozone yesterday to its highest level since the euro was established in 1999.
Eurozone unemployment rose to 10.7 percent in January from an upwardly revised 10.6 percent the previous month, according to Eurostat, the European Union's statistics office. The change was unexpected and is likely to trigger renewed concerns over the outlook for the wider economy.
If unemployment - and the accompanying fear of unemployment - is rising, consumers may rein in their spending. This could further dent an already-contracting eurozone economy that's reeling from widespread national austerity measures in response to too much government debt.
Consumers' appetite to open their wallets will likely be further constrained by the accompanying news from Eurostat that inflation in the eurozone unexpectedly also rose in February to 2.7 percent from the previous month's 2.6 percent.
The markets had been pricing in no change from January, and the increase takes inflation further above the European Central Bank's target of keeping price rises at just below 2 percent. Inflation has been above target for 15 months now.
"This is particularly bad news for consumers as they are not only facing high and rising unemployment but also still squeezed purchasing power," said Howard Archer, chief European economist at IHS Global Insight. "It had been hoped that eurozone consumer price inflation would be heading down by now but these hopes are being scuppered by high oil prices."
Oil prices have recently risen to nine-month highs on brighter economic news out of the US, the world's largest economy, and ongoing tensions over Iran's nuclear plans. Without the recent rise, analysts reckon inflation would be much closer to the ECB target.
Eurozone unemployment rose to 10.7 percent in January from an upwardly revised 10.6 percent the previous month, according to Eurostat, the European Union's statistics office. The change was unexpected and is likely to trigger renewed concerns over the outlook for the wider economy.
If unemployment - and the accompanying fear of unemployment - is rising, consumers may rein in their spending. This could further dent an already-contracting eurozone economy that's reeling from widespread national austerity measures in response to too much government debt.
Consumers' appetite to open their wallets will likely be further constrained by the accompanying news from Eurostat that inflation in the eurozone unexpectedly also rose in February to 2.7 percent from the previous month's 2.6 percent.
The markets had been pricing in no change from January, and the increase takes inflation further above the European Central Bank's target of keeping price rises at just below 2 percent. Inflation has been above target for 15 months now.
"This is particularly bad news for consumers as they are not only facing high and rising unemployment but also still squeezed purchasing power," said Howard Archer, chief European economist at IHS Global Insight. "It had been hoped that eurozone consumer price inflation would be heading down by now but these hopes are being scuppered by high oil prices."
Oil prices have recently risen to nine-month highs on brighter economic news out of the US, the world's largest economy, and ongoing tensions over Iran's nuclear plans. Without the recent rise, analysts reckon inflation would be much closer to the ECB target.
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