Eurozone unemployment has surged to a fresh
euro-era high, strengthening the case for a more aggressive European Central
Bank response to the region’s debt crisis, even as inflation remains stubbornly
high.
The seasonally-adjusted jobless total in the
17-country region rose by 126,000 to 16.3m in October, the highest since
comparable pan-eurozone data stated in 1995, according to Eurostat, the
European Union’s statistical office. Italy and Spain saw further significant
rises in unemployment. But in sharp contrast to the overall eurozone trends,
Germany reported further falls.
Wednesday’s data highlighted the
rapidly-worsening economic outlook for the eurozone, which may already have
fallen into, possibly severe, recession. The ECB is expected next week to
announce fresh support for the region’s banks – with likely measures including
loans lasting as long as three years and a broadening of the collateral
accepted in return for liquidity.
“The rise in unemployment confirms that the
financial crisis is reaching the real economy. Additional policy support by the
ECB is warranted,” said Jacques Cailloux, European economist at Royal Bank of
Scotland.
financial crisis is reaching the real economy. Additional policy support by the
ECB is warranted,” said Jacques Cailloux, European economist at Royal Bank of
Scotland.
Financial markets also expect a further cut
in the ECB’s main interest rate, which was lowered in early November from 1.5
per cent to 1.25 per cent. Some ECB governing council members, however, may
prefer to hold fire – so as to focus attention on support for the banking
sector and to keep monetary policy ammunition in reserve for use in 2012.
Eurozone annual inflation in November was 3
per cent – unchanged from the two previous months but otherwise the highest for
three years, according to separate Eurostat figures on Wednesday. The latest
reading suggested inflation pressures are taking time to abate, although they
are still expected to fall sharply in 2012. The ECB aims to keep the annual
inflation rate “below but close” 2 per cent over the medium term.
in the ECB’s main interest rate, which was lowered in early November from 1.5
per cent to 1.25 per cent. Some ECB governing council members, however, may
prefer to hold fire – so as to focus attention on support for the banking
sector and to keep monetary policy ammunition in reserve for use in 2012.
Eurozone annual inflation in November was 3
per cent – unchanged from the two previous months but otherwise the highest for
three years, according to separate Eurostat figures on Wednesday. The latest
reading suggested inflation pressures are taking time to abate, although they
are still expected to fall sharply in 2012. The ECB aims to keep the annual
inflation rate “below but close” 2 per cent over the medium term.
October’s rise took the eurozone unemployment
rate to 10.3 per cent of the labour force – up from 10.2 per cent in September
and compared with 9 per cent in the US. Joblessness remained highest in Spain,
where the rate hit 22.8 per cent. Italy’s unemployment rate rose to 8.5 per
cent.
rate to 10.3 per cent of the labour force – up from 10.2 per cent in September
and compared with 9 per cent in the US. Joblessness remained highest in Spain,
where the rate hit 22.8 per cent. Italy’s unemployment rate rose to 8.5 per
cent.
Germany’s labour market continued to benefit
from the robust health of its industrial sector, however. Eurostat showed the
country’s unemployment rate falling from 5.7 per cent in September to 5.5 per
cent in October. National data also released on Wednesday indicated the
downward trend had continued. Seasonally-adjusted unemployment fell a further
20,000 in November to 2.9m, according to the Bundesbank. German jobless totals
have been falling steadily for more than two years.
from the robust health of its industrial sector, however. Eurostat showed the
country’s unemployment rate falling from 5.7 per cent in September to 5.5 per
cent in October. National data also released on Wednesday indicated the
downward trend had continued. Seasonally-adjusted unemployment fell a further
20,000 in November to 2.9m, according to the Bundesbank. German jobless totals
have been falling steadily for more than two years.
Earlier this week, the German exporters’
association forecast further robust growth in 2012 and said financial market
turbulence had so far had little impact on the country’s economy.
association forecast further robust growth in 2012 and said financial market
turbulence had so far had little impact on the country’s economy.
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