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Euro zone unemployment hits new high

Unemployment in the 17-member euro area is continuing to rise, jumping to an all-time high of 10.7 percent in January 2012 with a record 16.9 million people out of work.

Euro symbol 2012 03 01Enlarge
They are now 16.9 million people out of work in the 17-member currency bloc, according to figures published Thursday by the Eurostat data agency. (Ralph Orlowski/Getty Images)

Unemployment in the euro zone continued to rise in January, jumping to an all-time high of 10.7 percent after the number of people without a job rose by 1.4 million compared with January 2011.

They are now 16.9 million people out of work in the 17-member currency bloc, according to figures published Thursday by the Eurostat data agency.

The jobless rate across the wider 27-nation European Union (EU) also broke the symbolic ceiling of 10 percent, climbing to 10.1 percent in January, The Daily Telegraph reported.

More than 24.3 million people were unemployed in the EU in January, up 191,000 from December and an increase of 1.49 million compared with January last year.

Spain continues to suffer from the highest unemployment in the euro zone, with the jobless rate standing at 23.3 percent in January. The country’s youth unemployment comes in at just under 50 percent.

The jobless rate in Italy climbed to 9.2 percent in January, the highest since monthly records started being kept, the country’s national statistics agency Istat said, according to the BBC.

Unemployment in the country, which is currently in its second recession in four years, is now at its highest rate since the first quarter of 2001.

More from GlobalPost: Unemployment soars in euro zone, plummets in Germany

Thursday’s figures reveal the increasing division between northern and southern euro zone states after two years of economic turmoil and financial crisis, The Financial Times reports.

While Portugal, Ireland, Greece and Spain are all stricken by double-digit unemployment, Austria’s rate of 4 percent is the lowest in the bloc, while the rate stands at 5 percent in the Netherlands and at 5.8 percent in Germany.

Meanwhile, the miserable news on jobs was accompanied by a rise in inflation, with the consumer price index in the euro area edging up to 2.7 percent last month due to high oil prices during a cold winter.

Howard Archer, an economist at IHS Global Insight, said the reports represented a “double whammy” for the euro zone.

The figures came as EU leaders gathered in Brussels for a two-day summit beginning on Thursday evening, The Independent reports, where head of government will try to thrash out a strategy to boost jobs and economic growth.

Eight euro zone states are expected to contract during the first three months of 2012. Last week the European Commission predicted that the bloc’s overall economy will shrink by 0.3 percent this year, instead of growing by 0.5 percent as forecast in November.

Yesterday the European Central Bank provided a second tranche of cheap three-year funds totalling $713 billion to 800 banks across the EU, fuelling hopes that more cash will find its way to loan-hungry businesses and governments will see their borrowing costs eased further.  

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http://www.globalpost.com/dispatch/news/regions/europe/120301/euro-zone-unemployment-hits-new-high