New high for eurozone unemployment

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New high for eurozone unemployment

New high for eurozone unemployment
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The number of people without a job in the eurozone in May rose to the highest since the introduction of the euro.

With increased lay-offs in France, Spain and even Austria, the region’s unemployment total is now at 17.56 million, that is 11.1 percent of the working population.

The figures were compiled by the EU’s statistics office Eurostat.

Economists at ING predict it will go as high as 12 percent as the debt crisis continued to eat away at the currency bloc’s fragile economy.

Unemployment will continue to rise until we see an improvement in the economy, and that may not be until next year,” said Steen Jakobsen, chief economist at Saxobank.

“The next few months are likely to constitute a low in the growth cycle,” he said, predicting the eurozone’s economic output to show a contraction in the July-to-September period.

In May, unemployment rose by a tenth of a percentage point in France, the eurozone’s second largest economy, to 10.1 percent, while joblessness in Spain, the worst in the bloc, rose again to 24.6 percent from 24.3 percent in April.

Even in wealthier Austria, the number of people out of work ticked up by two tenths of a percentage point to 4.1 percent in May, although that puts unemployment back at January levels.

The downturn is also revealing the effects of overly rigid labour laws, where the wage-setting process takes too long, job protection is excessive and working hours are inflexible, shutting talented youngsters out of the market.

Partly as a result of that, youth unemployment rose to 52 percent in both Spain and Greece in May, Eurostat said.