🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

UPDATE 1-Euro zone Feb unemployment jumps, shows pace of slump

Published 04/01/2009, 05:16 AM
Updated 04/01/2009, 06:24 AM
UBSN
-
TTEF
-

* Unemployment hits 8.5 percent, above market forecasts

* Pace of jobless rise adds pressure for ECB rate cut

(Adds economists' comments, German data, background)

By Jan Strupczewski

BRUSSELS, April 1 (Reuters) - Unemployment in the euro zone jumped more than expected in February to 8.5 percent, data showed on Wednesday, underlining the speed of economic deterioration a day before the ECB meets on interest rates.

Joblessness in the 16 countries using the euro rose from January's upwardly revised 8.3 percent of the workforce, Eurostat, the European Union's statistics office, said.

Economists had expected a level of 8.3 percent for February and said the unemployment rate was likely to reach 10 percent this year as the economic crisis deepens.

"This will dampen down wage and inflation pressure and if the ECB needed any more confirmation to cut rates, then this is it," said Sunil Kapadia, economist at UBS.

"We expect a 50 basis points cut on Thursday and we think that will probably be the floor given that market rates will be close to zero at that point. But we do expect at some point further measures," he said.

March unemployment data for the euro zone's biggest economy, Germany, and the euro zone PMI index provided a glimpse of what lay ahead for the euro zone.

Germany suffered its biggest jump in unemployment in March since the outset of the global economic crisis with the jobless total rising for a fifth straight month, Federal Labour Office figures showed on Tuesday.

The higher-than-expected German March jobless rise of 69,000 month-on-month in seasonally adjusted terms was the sharpest in over four years.

The euro zone PMI index showed job losses surging in March and the employment sub-index sank to a record low in the survey's near 12-year history.

Eurostat said the number of euro zone jobless in February rose by 319,000 to 13.486 million and by 478,000 to 19.156 million in the whole of the 27-nation European Union.

"February's very sharp rise in euro zone unemployment provides further confirmation that a consumer recovery is only a distant prospect," said Jennifer McKeown, economist at Capital Economics.

She noted that of the total rise in jobless of just over 2 million, 1.6 million had occurred in the last six months. "(This) is an unprecedented rate of deterioration," she said.

Among euro zone members, Ireland and Spain saw the biggest increases in unemployment in February, both up 0.7 percentage point to 10.0 and 15.5 percent respectively.

Unemployment rose in all euro zone countries for which data was available except the Netherlands, where it stayed at 2.7 percent for the seventh month in a row. (Additional reporting by Huw Jones and Foo Yun Chee; 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.