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Eurozone unemployment rate hits record high of 11.7%

The eurozone unemployment rate hit a record high in October, rising to 11.7 percent.

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Eurozone's unemployment rate hit a new record in October, rising to 11.7 percent, according to a report published on November 30, 2012. (PEDRO ARMESTRE/AFP/Getty Images)

The eurozone's unemployment rate hit a new record high in October, reaching 11.7 percent, according to data released on Friday.

The BBC reported that while the jobless rate rose, the rise in consumer prices slowed sharply and inflation fell from 2.5 percent to 2.2 percent in November.

According to the figures released by Eurostat, the unemployment rate was the highest since the introduction of the euro in 1999, said the Associated Press.

The eurozone returned to recession in the third quarter, the AP noted, saying it had two consecutive quarters of negative growth.

Eurostat's numbers suggested 18.7 million were out of work in the 17-nation eurozone, 173,000 higher than the previous month, and 2.2 million higher than the year before. The wider bloc of the European Union had an unemployment rate of 10.7 percent, with a total of 25.9 million out of work.

The BBC noted that the contrast between countries deepened, as Spain saw its jobless rate rise from 25.8 percent to 26.2 percent, while Germany's held steady at 5.4 percent and Austria's fell from 4.4 percent to 4.3 percent.

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Reuters said that the new figures might prompt further interest cuts by the European Central Bank. The ECB's last cut, in July, was to a record low of 0.75 percent.

ECB president Mario Draghi warned that the euro would not emerge from its crisis until the second half of 2013, according to the BBC. He also said that government spending cuts would hurt growth, in the short-term.

The Wall Street Journal summed up the crisis:

"Record levels of unemployment and weak consumer spending show the impact the crisis is having on the real economy. As governments have cut spending and raised taxes to heal their finances, the economy has weakened, causing businesses to curb investment and lay off more staff, undermining growth prospects further."

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http://www.globalpost.com/dispatch/news/regions/europe/121130/eurozone-unemployment-rate-hits-record-high-117