Eurozone inflation at 1.9pc as jobless total rises to 16 million
Published 30/10/2010 | 05:00
European unemployment hit a record 10.1 percent in September, the EU said yesterday.
And EU data agency Eurostat's flash estimate for annual eurozone inflation is expected to be 1.9pc in October, a rise from 1.8pc in September.
The seasonally-adjusted unemployment rate for the 16 countries that share the euro moved up from 10pc, maintaining its slow but painful rise over the past 12 months and underlining the lagging nature of recession's impact on job markets.
That meant just under 16 million men and women across the eurozone are out of work, the numbers rising by 67,000 in the euro countries month-on-month and some 424,000 on an annual basis.
Spain remains the worst affected, with a rate of 20.8pc; while the lowest rates were found in the Netherlands at 4.4pc, and Austria at 4.5pc.
Germany recorded a big fall from 7.6pc to 6.7pc compared to last year.
For the 27-nation EU as a whole, the rate was unchanged at 9.6pc.
In the US, the unemployment rate was 9.6pc in September. Japan last posted 5.1pc for August.
Although inflation rose to a 23-month high, London-based IHS Global Insight analyst Howard Archer said consumer price inflation "is unlikely to be of serious concern" to the European Central Bank.
Meanwhile, the eurozone's annual inflation has unexpectedly accelerated to it's fastest rate since November 2008 and above the 1.8pc forecast by economists in a Bloomberg survey.
Crude-oil prices have jumped 9.2pc over the past two months, leaving companies and consumers with less money to spend just as a stronger euro threatens to hurt exports.
With the recovery faltering and governments tackling budget deficits, companies may keep hiring plans on hold which will further erode spending.
"The labour market has stabilised a little but unemployment will rise further," said Christoph Weil, an economist at Commerzbank AG in Frankfurt.
"That means we won't see any price pressures even if energy prices are driving inflation to some extent.
"Inflation won't be an issue in 2011." Yesterday's inflation report is an initial estimate and the statistics office will release a breakdown of consumer prices on November 16.
Core inflation, which excludes volatile costs such as energy prices, was at 1pc in September.
"Headline inflation is likely to remain under some upward pressure in the near term," said Martin van Vliet, an economist at ING Bank in Amsterdam.
"But it should moderate again the course of next year, as energy-price inflation falls back and core inflation remains low." (Bloomberg).