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Eurozone: no jobs, no growth

Eurozone: no jobs, no growth
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There was no respite on the jobs front for the eurozone as the region’s unemployment rate hit 12 percent of the workforce in February.

January’s total was also revised up – from 11.9 to 12 percent.

That means more than 19 million people without work.

Unemployment among under 25 year olds rose to 23.9 percent, and in Greece and Spain they remain over 50 percent.

Chantal Hughes, spokeswoman for the European Commissioner for Internal Market and Services, said: “Such unacceptably high levels of unemployment are a tragedy for Europe. They signal how serious is the crisis some eurozone countries are now in. The European Union and its member states have to mobilise all available instruments to create jobs and to return to sustainable economic growth.”

At the same time we learned manufacturing in Europe’s major economies suffered another month of mostly deep decline in March.

Surveys of businesses’ purchasing managers (PMIs) showed factory activity in Germany and Ireland, slipped last month after reviving in February.

Everywhere else, things got worse. Spanish manufacturing declined at its fastest pace since October, while in France, factory activity retreated for a 13th straight month.

“The euro zone’s March manufacturing PMIs … (banishes) the recovery scenario projected by the European Central Bank further beyond the realm of likely probabilities,” said Lena Komileva from G+ Economics in London.

The jobs and manufacturing data add pressure for an interest rate cut by the European Central Bank.

No Cyprus factor

The escalation of the crisis in Cyprus in the final week of March, however, had little bearing on euro zone manufacturing activity, at least judging by the fact the final PMI reading was no worse than its preliminary assessment.

“We’ve had the Italian election, we’ve had the Cyprus story; we’re a little bit uncertain to what extent that has played in,” said Anatoli Annenkov, senior European economist at Societe Generale.

“But certainly, on the manufacturing side, that’s a little bit weaker than what we’d hoped.”