The number of people out of work in the eurozone hit a record high in June.
The latest figures from Eurostat, the EU’s statistics office, showed 17.8 million people were unemployed. That total has increased every month for the last 14 months.
However there is huge disparity. Unemployment was as low as 4.5 percent of the working population in Austria while at the other extreme it reached 24.8 percent in Spain, the highest level in the currency bloc.
The overall unemployment rate was 11.2 percent in June but was much worse among young people - those under 25-years-old – at 22.4 percent.
The figures were also revised upwards slightly to 11.2 percent for May.
Spain slid deeper into recession in the second quarter as a tough new round of austerity to head off the country’s budget crisis affected both overall demand and the prices consumers have to pay for goods.
One unemployed Spaniard we spoke to blamed politicians and banks for the economic downturn: “They should stop telling us fairy tales and solve the problems. The real cause is the banks did whatever they wanted, without restraint and there were no controls, and that’s why we’re broke.”
Economists see signs that even Germany – the region’s economic engine of growth - is suffering the weakening effects of the eurozone crisis.
Separately released figures showed more Germans were without a job in July although the employment rate was stable at 6.8 percent.
Inflation stays tame
Inflation in the eurozone remained steady for the third straight month in July.
Eurostat said consumer prices in the 17 nations sharing the euro rose 2.4 percent in July on an annual basis.
Inflation maintained the level first touched in May as Brent crude fell sharply and brought prices down.
The lack of price pressures gave the European Central Bank room to cut its interest rate to a record low of 0.75 percent in July.
The ECB’s August meeting – typically a low-key affair during the European summer – will be intensely watched for any signs that policymakers are willing to do more to help reduce the high cost of borrowing for governments and banks in Spain and Italy as they sell bonds.
But rising crude prices could reduce the room for rate cuts, economists say, as inflation cools more slowly.
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