Black Friday is Now! Don’t miss out on up to 60% OFF InvestingProCLAIM SALE

UPDATE 1-Euro zone April joblessness hits near 10-year high

Published 06/02/2009, 05:50 AM
Updated 06/02/2009, 05:56 AM

(Adds economists' comments)

By Jan Strupczewski

BRUSSELS, June 2 (Reuters) - Euro zone unemployment jumped in April to its highest level in nearly 10 years, data showed on Tuesday, boding ill for any quick recovery from the worst economic recession since World War Two.

The unemployment rate in the 16-nation euro zone rose to 9.2 percent from March's 8.9 percent as 396,000 people lost their jobs, bringing the number of people out of work to 14.579 million, the European Union statistics office said.

The figure, above the 9.1 percent expected by economists in a Reuters poll, was the highest since September 1999, signalling the real economy has yet to see the glimmers of optimism appearing in sentiment surveys.

"Although there are mounting signs that the rate of economic contraction across the euro zone is moderating appreciably ... this is unlikely to prevent unemployment from rising substantially further," said Howard Archer, economist at IHS Global Insight.

The European Commission expects unemployment in the euro zone to rise to 9.9 percent this year from 7.5 percent in 2008 and to 11.5 percent in 2010.

"Unemployment is a lagging indicator and it will be some time before any improvement in economic activity feeds through to help the jobs outlook," Archer said.

The Commission expects the euro zone economy to return to growth in year-on-year terms from the middle of 2010.

"Sharply higher, rising unemployment will weigh down on euro zone consumer spending, especially as it will be liable to lead to slowing wage growth," Archer said.

"This threatens to outweigh the boost to purchasing power coming over the coming months from sharply retreating inflation."

Consumer prices stopped growing in the euro zone in May, a first estimate showed last week. Economists forecast they will fall in June and July in annual terms because oil prices are less than half of their mid-2008 level.

In the entire 27-country European Union, unemployment rose to 8.6 percent from March's 8.4 percent, hitting its highest level since the start of 2006.

Spain had the highest unemployment rate in the EU at 18.1 percent, up from 17.3 percent in March, closely followed by Latvia on 17.4 percent, up from 16.1 percent.

In Germany, the euro zone's biggest economy, unemployment rose to 7.7 percent from 7.6 percent and in France, the second-biggest, to 8.9 percent from 8.8 percent. (Additional reporting by Marcin Grajewski; Editing by Dale Hudson)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.