As China and Japan dominate the Olympic podiums there is yet more bad news for Europe as euro-zone unemployment remains at its highest ever rate for a second month.
The European Union’s statistic office in Luxembourg has reported today that the euro-zone jobless rate reached 11.2% in May, the highest level for the currency bloc since the data series started in 1995, and held that level throughout June.
Across the 17 nation euro-zone the consistently deepening economic slump and fissuring debt crisis have laid to unprecedented layoffs. In such uncertain times employers as well as policy makers are considering their options carefully.
Howard Archer, chief European economist at IHS Global Insight, gave his view on the situation: ‘Companies generally are under serious pressure to keep their labour forces as tight as possible to contain their costs in the face of the current limited demand, strong competition and worrying and uncertain growth outlook. There looks to be a very real danger that the euro-zone unemployment rate could reach 12 per cent in 2013’.
Today’s report showed that in June the amount of unemployed people across the euro-zone had reached 17.8 million, an increase from May of almost 125,000.
The highest jobless rate belonged to Spain, at 24.8 per cent. Portugal was the next highest at 15.4 per cent, and at 14.8 per cent Ireland wasn’t far behind. The jobless rate for France in June was 10.1 per cent.
For Spanish and Italian companies the job cuts may be far from over as their governments search for ways of capping gaps in their budget. France’s jobless rate could also be set to rise after the country’s biggest phone-equipment supplier, Alcatel-Lucent SA, intimated that continued downturn could result in the loss of thousands of jobs. If the Peugeot job cuts go ahead as planned this could mean that up to 13,000 French citizens could soon be joining the jobless.
Although the statistics office had originally reported an overall euro-zone jobless rate figure of 10.1 per cent for May, the report released today actually met the expectations laid out by economists in a Bloomberg News survey.
Based on an estimate released by the EU’s statistics office, the July inflation rate for the euro-zone will not alter from the rate reported in May and June but will continue to hover at 2.4 percent. In August they will release a concise price breakdown, including figures for core inflation.
Over the past three months confidence in the euro has dipped significantly, but after today’s release of euro-zone unemployment figures the common currency underwent little change.