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Record unemployment clouds eurozone outlook

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(Globalpost/GlobalPost)

"Unacceptably" high eurozone unemployment ran at a record 12 percent in February, official data showed Tuesday, with more than 19 million people on the dole a "tragedy" for Europe.

The figures and a weak manufacturing sector report added to the gloom after data earlier this year had encouraged some hope the European economy might finally have touched bottom.

Analysts said the reports pointed instead to worse to come, with the jobless queues likely to grow as the debt crisis continues to sap the economy.

"Such unacceptably high levels of unemployment are a tragedy for Europe," said a spokeswoman for EU Employment Commissioner Laszlo Andor.

"The EU has to mobilise all available resources to create jobs ... young people in particular need help," she said.

The Eurostat data agency said unemployment in the 17-nation eurozone at 12 percent was unchanged from January when the figure was initially given as 11.9 percent.

In the full 27-member EU, unemployment in February rose to 10.9 percent from 10.8 percent, with 26.34 million out of work.

Some 33,000 joined the jobless queues in the eurozone and 76,000 in the EU over the month of February, Eurostat said.

Compared with a year earlier, the increase was 1.78 million in the eurozone and 1.81 million in the EU.

The highest unemployment rates in February were in Spain with 26.3 percent and neighbour Portugal, on 17.5 percent. Greece was put at it 26.4 percent but this figure is for December, the latest available.

The lowest rates were 4.8 percent in Austria and 5.4 percent in Germany, Europe's biggest economy.

With youth unemployment a huge cause of concern, Eurostat said the jobless rate for under-25s ran at 23.9 percent in the eurozone and 23.5 percent in the EU.

Among the countries with the highest youth jobless levels, Spain was on 55.7 percent, followed by Portugal on 38.2 percent and Italy with 37.8 percent.

Greece was the highest with 58.4 percent but this was also for December.

Howard Archer of IHS Global Insight said the figures marked a "dismal landmark" at 12 percent -- already very close to the official EU 2013 forecast of 12.2 percent.

Archer said unemployment was now up for a consecutive 22nd month and even if the report did show the jobless numbers were not rising as fast as before, "an overall turnaround in eurozone labour markets still looks some way off."

The second quarter outlook is "far from bright," he said, and unemployment could "very well near 12.5 percent late in 2013 or early in 2014."

Jennifer McKeown at Capital Economics was equally downbeat.

The February data "is further confirmation of the underlying weakness of the economy," Mckeown said.

Manufacturing data meanwhile showed the slump deepening sharply as even Germany was dragged down.

The Markit Eurozone Manufacturing Purchasing Managers Index fell to 46.8 points in March, up from an initial estimate of 46.6 but well short of the already weak 47.9 posted in February.

The outcome left the closely followed indicator at a three-month low and below the 50-points boom-bust line since August 2011.

Germany at 49 points slipped to a two-month low while "rates of decline gathered pace in all the other nations ... with the exception of France," Markit said in a statement.

France stood at 44 points, a three-month high, while Italy was on 44.5, its lowest for seven months and Spain on 44.2, a five-month low.

Manufacturing "looks likely to have acted as a drag on the economy in the first quarter, with an acceleration in the rate of decline in March raising the risk that the downturn may also intensify in the second quarter," Markit chief economist Chris Williamson said in a statement.

"The surveys paint a very disappointing picture across the region," Williamson said.

The Cyprus debt bailout appeared not to have had any impact so far, he said, but "the concern is that the latest chapter in the (eurozone debt) crisis will have hit demand further in April."

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http://www.globalpost.com/dispatch/news/afp/130402/record-unemployment-clouds-eurozone-outlook