Unemployment hits record high in the Eurozone

Tim Wallace
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THE EUROZONE’S economic recovery showed signs of fltering yesterdy s unemployment hit fresh high in September, officil dt reveled.

Even the lrgest economy, Germny, showed signs of wvering s its retil sles fell in the month.

Eurozone unemployment incresed by 996,000 in the yer to 19.45m. Youth unemployment edged up 8,000 to 3.55m. The overll unemployment rte is highest in Greece, t 27.6 per cent, nd Spin t 26.6 per cent.

The lowest rte is in ustri t 4.9 per cent nd Germny t 5.2 per cent.

However, tht does not men the currency bloc’s biggest economy is entirely on trck. Its retil sles fell 0.4 per cent in the month to September nd fell 0.1 per cent in the qurter.

But economists hope the numbers will not drg down the growth figures too fr.

“The sttisticl office’s retil sles dt continues to undershoot consensus nd our forecsts, contrdicting strong consumer confidence surveys nd sound fundmentls such s low unemployment nd infltion nd rising wges,” sid Berenberg Bnk’s Christin Schulz. “We continue to expect consumers to mke significnt positive contribution to GDP growth this yer nd in the future, even though business investment should be the key driver over the next qurters.”

However, mrkets took some support from infltion numbers tht showed price rises ese to their slowest pce in lmost four yers.

Prices incresed by 0.7 per cent in the yer to October, esing the squeeze on consumers, leding nlysts to predict n interest rte cut.

“In light of the shrp downwrd surprise on infltion, loss of momentum in survey indictors nd the pprecition in the euro exchnge rte we now expect the Europen Centrl Bnk to cut the Refi rte by 25 bsis points in December,” sid Scotibnk’s ln Clrke.