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Unemployment in eurozone at record 12.1%

Stockhouse Editorial
0 Comments| July 1, 2013

(The Canadian Press) LONDON _ Unemployment across the 17 European Union countries that use the euro hit another all-time high in May after the previous months' figures were revised down, official data showed Monday.

Eurostat, the EU's statistics office, said the eurozone's unemployment rate rose 0.1% in May to the new all-time high of 12.1%. That's a new record for the region following the revisions as April's original 12.2% estimate was amended to 12.0%.

The figures will make sobering reading for the region's politicians as they gather in Berlin this week to tackle the problem of youth unemployment _ nearly one in four people aged under-25 in the eurozone are out of work.

Across the eurozone, there were 19.22 million people unemployed, 67,000 higher than theprevious month _ a closer look at the figures show that Italy was largely behind the increase.

Even though the monthly rises outside of Italy were relatively modest, analysts still expect unemployment in the eurozone to continue to rise as the region remains stuck in recession that started in late 2011.

Figures next month will show whether the eurozone's economy continued to shrink in the second quarter of the year _ the seventh quarter in a row. Even if the region escapes the grip of recession, unemployment is likely to carry on rising for a while yet as the labour market is a lagging indicator of economic activity.

In the U.S., for example, unemployment rose for a couple of years after the end of the recession there in 2009, before it started falling toward the current level of 7.6 per cent.

Most economists think it will be a close call whether the eurozone's recession comes to an end this quarter. While countries such as Germany have seen their economies prosper, those at the forefront of Europe's debt crisis, such as Greece and Spain, continue to see economic contraction on a massive scale.

These countries have suffered wave after wave of austerity measures in order to get their public finances back into shape following the financial crisis that hit the world economy in 2008/9.


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