Eurozone unemployment remains high as economy lags

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AMSTERDAM (AP) — A full year since emerging from recession, the stuttering economy of the 18-country
eurozone is still unable to create enough jobs to make a significant dent in the unemployment rate.
The number of unemployed people in the 18 countries that use the euro declined by a slight 28,000 in May
from the previous month to 18.6 million, the statistics office Eurostat said Tuesday. But that was not
enough to bring down the jobless rate, which remained at 11.6 percent.
Though the eurozone officially came out of recession in last year’s second quarter, the jobless rate has
fallen only by 0.4 percentage points since then.
Economists said the lack of any real improvement is troubling, despite proclamations by some European
politicians that the worst of the continent’s economic crisis is behind it.
“May’s unemployment data highlight that the eurozone’s economic recovery is still too weak to erode the
significant amount of slack in the labour market,” said Jessica Hinds of Capital Economics in a research
note.
Divergence remains strong between the countries of northern and southern Europe: German unemployment was
5.1 percent, while Italy’s was 12.6 percent, Spain’s 25.1 percent, and Greece’s 26.8 percent — though
Greece is still reporting March figures.
The situation is only slightly better in the wider European Union, which includes non-euro countries like
Britain and Sweden. There, the unemployment rate edged down to 10.3 percent from 10.4 percent the month
before.
By comparison, the U.S. unemployment rate was at 6.3 percent in May.
European Central Bank President Mario Draghi has said that among his greatest worries is that high
unemployment in the eurozone, a problem for years, becomes entrenched. When a large part of the labor
force is out of work for an extended period of time, people fail to gain new skills they need to be
productive and help the economy grow.
The ECB last month announced a string of measures to help the eurozone economy and nudge up inflation,
which is languishing at a low 0.5 percent rate. But the central bank, which will meet again on Thursday,
has stressed that governments should also act to ease unemployment by reforming their economies, cutting
red tape and bureaucracy.
Economist Bill Adams of PNC Financial Services Group said the ECB will likely not act again this week but
predicited it “sooner or later will have to confront the uncomfortable likelihood that significantly
more action is needed.”
Tuesday’s report showed youth unemployment in particular remains a grave problem, at 23.3 percent across
the eurozone. It is at crisis levels in southern Europe, with both Spain and Greece showing unemployment
rates for people under the age of 25 at over 50 percent.

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