Eurozone jobless rate hits a record high of 11.4pc
The unemployment rate in the euro area reached the highest on record in August as the festering debt crisis pushed Europe's economies towards recession. Economists say the rate will rise further in the months ahead.
Joblessness in the 17 countries sharing the euro was 11.4pc of the working population in August, which was stable compared to July on a statistical basis, but another 34,000 people were out of work in the month, the EU' statistics office Eurostat said yesterday.
Ireland, which has seen unemployment triple since the debt crisis began, had the fourth highest rate at 15pc.
That left 18.2 million people unemployed in the euro zone, the highest level since the currency's inception in 1999, while 25.5 million people were out of a job in the wider 27-nation EU, Eurostat said.
The debt crisis that began in Greece in 2010 and has spread across the eurozone to engulf Ireland, Portugal, Cyprus and the much bigger economy of Spain has devastated business confidence and sapped companies' abilities to create jobs.
"There is simply not enough growth in the euro region to create sufficient jobs and the unemployment rate still has not reached its peak," said Thomas Costerg, an economist at Standard Chartered Bank in London.
"A worrying trend is that the number of unemployed is now also expanding in core countries like Germany, which had been rather sheltered up to now."
Joblessness could go beyond 19 million by early 2014, or about 12pc of the eurozone's workforce, according to a new study by consultancy Ernst & Young, predicting that rate to rise to 27pc in Greece. That compares with 24.4pc in the country in June, the latest data available.
"In this difficult environment, companies are likely to reduce employment further to preserve productivity and profitability," the report said.
As our graphic shows, the joblessness picture also obscures wide regional variations. In Austria, unemployment is the eurozone's lowest at 4.5pc in August, a slight fall from July, while Spain has the highest rate at 25.1pc in the month.
Germany's unemployment rate remained at 5.5pc in August, although the number of people without a job rose for a sixth straight month in September.
In France, the August jobless rate held at 10.6pc, while in Spain the rate increased to 25.1 pc, the highest in the euro area. "An end to the horror is not in sight," said Carsten Brzeski, senior European economist at ING Group in Brussels.
"Unemployment rates are still increasing and look set to increase further. It is no longer an exclusive peripheral problem as labour markets in core countries are also weakening.
"All of this could make unemployment the next big issue of the eurozone crisis management, making calls for more eurozone solidarity louder."