Eurozone grapples with another record high in joblessness

THE NUMBER of jobless people searching for work continues to tick upward in the embattled Eurozone, rising to a rate of 12.1 per cent in May, according to Eurostat.

The proportion of the workforce that is unemployed in the currency union has risen steadily upward since the financial crisis in 2008. At its low in 2007, it sat at 7.1 per cent.

Although Greek unemployment has not been released for April or May, Spain’s rate of unemployment was higher in May than Greece’s was in March, at 26.9 and 26.8 per cent respectively. Despite high headline figures, there are enormous differences between countries in the euro area. Austrian unemployment rose over the same 12-month period, but to only 4.7 per cent.

Euro area youth unemployment also rose from May 2012, from 23 to 23.8 per cent. Over 50 per cent of Greek and Spanish under-25s are out of work, while in Austria and Germany the rate is under 10 per cent.

Eurostat also released figures for consumer price inflation yesterday, showing a small rise in June, from 1.4 per cent to 1.6 per cent, mostly driven by energy price increases. The rate is still below target.

Despite some indicators pointing to a moderate improvement in the euro area’s economic performance, Jonathan Loynes, chief European economist at Capital economics, suggested that unemployment was a reason to be cautious: “With inflation below target and unemployment still rising, the case for additional policy support for the Eurozone economy remains strong”.