Europe

Unemployment misery deepens in Spain and Greece

The eurozone debt crisis extracted a heavy price in Spain and Greece to start the year as labor markets in both countries continued to shed jobs.

CNN Money,

25 April 2013

The number of unemployed in Spain broke the 6 million barrier during the first quarter, a new record. The unemployment rate rose to 27.2%, according to data released Thursday by the government.

Spain's out-of-control unemployment is matched in Europe only by Greece, which posted a 27.2% jobless rate for January, the most recent month available.

Spain's economy, the fourth-largest in the eurozone, is much bigger than that of Greece, and more systemically important.

But the countries have been plagued by a similar concoction of budget deficits and economic stagnation. Both responded with austerity measures that have eased their debt problems but have hurt their economies.

They also share severe crises in youth unemployment.

In Greece, 34.2% individuals aged 25 to 34 are unemployed. It's even worse for younger workers -- 59.3% of Greeks aged 15 to 24 are out of work.

For Spaniards aged 16 to 24, the unemployment rate is 57.2%.

German downturn bodes ill for eurozone

A fall in Germany's private sector output in April could signal worse times to come for the shrinking eurozone economy.

CNN Money,

25 April 2013

Financial data provider Markit said its initial purchasing managers' index (PMI) reading for German manufacturing and services fell to a 6-month low of 48.8 from 50.6 in March, pointing to the first contraction in output since November.

The reading for the eurozone as a whole was unchanged at 46.5, indicating a drop in activity for the 19th time in the past 20 months. New business in manufacturing and services in the eurozone suffered its steepest rate of decline since December.

Renewed concerns about the outlook for southern Europe following the messy Cyprus bailout at the end of March may have contributed to subdued business confidence.

Markit Chief Economist Chris Williamson said the data reflected a weak start to the second quarter and suggested the region's downturn could intensify rather than ease in the months to come.

"Worryingly, the rate of loss of new business gathered further momentum, suggesting that activity and employment could fall at steeper rates in May," he said.

"The renewed decline in Germany will also raise fears that the region's largest growth engine has moved into reverse, thereby acting as a drag on the region at the same time as particularly steep downturns persist in France, Italy and Spain," Williamson added.

Related: China manufacturing expansion slows

French private sector output continued to contract in April, although the pace of decline slowed.

Markit said its April PMI data pointed to a contraction in the eurozone economy of 0.4%, compared with 0.2-0.3% expected in the first quarter of the year.

The International Monetary Fund cut its 2013 forecast for the eurozone economy last week, saying it expected gross domestic product to contract by 0.3%. The European Central Bank is slightly more pessimistic, predicting a fall of 0.5% this year.

European policymakers continue to predict a gradual recovery in output in the second half of the year but are coming under growing pressure to relax a policy of austerity that has contributed to a sharp loss in domestic demand.

Recession in Germany would remove one of the few sources of eurozone growth at a time when the global outlook is also deteriorating. New car sales in Germany fell by 13% in the first quarter of 2013, suggesting a loss of confidence among consumers as well as businesses.

French unemployment at new high

The number of unemployed people in France rose to a fresh high last month, official data shows.

BBC,

25 April, 2013

There are now some 3.2 million people seeking work in France, 11.5% more than a year ago and 1.2% more than in February, the labour ministry said.

The number of jobseekers is the highest since records began in January 1996.

The ministry does not express the jobseeker figure as a percentage of the work force, as done by the International Labour Organization.

But it did say the unemployment rate was 10.2% at the end of 2012, and current unemployment had not breached the 10.7% high seen in 1997.

Speaking earlier during a state visit to China, French President Francois Hollande said the government's priority was tackling France's rising unemployment.

"Everything the government does, in every ministry, must be to continue to strengthen the battle for jobs," he told a news conference.

"I want all the French people to unite behind this one national priority."

He has promised to reverse the rise in unemployment before the end of the year.

The figures underline the grave economic problems still haunting eurozone economies, after Spain earlier reported record unemployment amid its continuing recession.