Unemployment across the 17-nation eurozone scaled new heights in July with 18 million or 11.3%, the highest since the launch of Europe’s monetary union in 1999, according to Eurostat, the European Union’s statistical office.
The statistics reveal that 22.6% of unemployment was seen among under 25s. The total number of people who turned jobless in July increased by two million, as compared to the same period last year. The sharp increase indicated how austerity measures were adversely affecting economic growth, as the eurozone inched closer to recession last quarter.
Spain posted the worst unemployment figures with 25.1% of its workers population out of a job, and a staggering 52.9% under-25s unemployment rate. Greece followed next with 23.1%. Meanwhile, the German and Italian unemployment remained steady at 5.5% and 10.1%, respectively, while in France the unemployment rate increased 10 basis points to 10.3%.
Situation has worsened with rising inflation which rose to 2.6% in August, compared with 2.4% a month earlier, according to “flash” data released by Eurostat.
The continuous rise in unemployment, besides a slowing growth rate and declining industrial output would usually lead the central bank to take measures to stimulate the economy. But with inflation rising again because of increase in commodity prices, the central bank may hesitate to cut interest rates next month.
“Inflation should resume its downward trend over the remainder of the year and will not be enough on its own to prevent the ECB from adopting additional measures to support the economy either next week or soon after”, Ben May, eurozone economist at Capital Economics, said.