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Eurozone unemployment stuck near record high

Published: Tuesday, April 1, 2014 10:44 a.m. CDT
Caption
(Petros Giannakouris)
German Finance Minister Wolfgang Schaeuble, left, chats with Greek Finance Minister and President of the rotating EU council Yannis Stournaras during a Eurogroup meeting at Zappeion Hall in Athens, on Tuesday, April 1, 2014. Finance ministers from the eurozone and the wider European Union are gathering in Athens amid tight security, with Greece hoping for a gesture of support for the release of long-delayed funds from the country's multi-billion-euro bailout. (AP Photo/Petros Giannakouris)

BRUSSELS – The 18-country eurozone may have emerged from recession last year, but that has done little good to the jobs market, with unemployment stuck near a record high since then.

A new report on Tuesday showed that while the number of jobless in the currency union dipped in February, the unemployment rate remained at 11.9 percent — where it has been since October after peaking at 12.1 percent earlier in the year.

The figures, published by the Eurostat statistical agency, illustrate how long it will take for the continent's hardest-hit countries to return to economic health after years of financial upheaval.

"The figures suggest that the economic recovery is still too weak to make a significant dent in the high level of unemployment," said analyst Jonathan Loynes of Capital Economics.

The situation varies wildly from country to country.

While Germany continues to enjoy a low jobless rate of 5.1 percent, countries that had to make spending cuts to reduce debt are still suffering.

Spain has the bloc's highest rate alongside Greece — at 25.6 percent, down only slightly from 25.8 percent in January. Italy's labor market is in fact worsening — unemployment rose to a record 13 percent from 12.9 percent a month before.

Overall, the number of unemployed in the eurozone dropped, but only by 35,000, leaving almost 19 million still out of work.

In the wider 28-nation EU — which includes members like Britain and Poland that don't use the euro currency — the unemployment rate dipped to 10.6 percent from 10.7 percent in January.

Experts say joblessness is likely to take some time to come down. Businesses are still wary of hiring and investing after worrying about a global recession in 2008-2009 and the potential collapse of the eurozone after that. There is also mounting concern over low inflation, which raises the risk that consumers might put off spending in hopes of discounts later on.

The eurozone's economy is not growing quickly enough to bring confidence back.

The European Commission, the EU's executive arm, predicts the eurozone economy will pick up and grow 1.1 percent this year. While that would be the bloc's best performance since 2011, it would still pale in comparison to the U.S. economy, which is expected to grow around 3 percent.

"Unemployment remains worryingly high ... and seems unlikely to come down markedly any time soon given the probably gradual recovery," said Howard Archer, an analyst with IHS Global Insight.

That bodes ill for the young, the demographic that has been hit hardest by the recent financial crisis. The eurozone unemployment rate for those under the age of 25 dropped only slightly in February to 23.5 percent from 23.6 percent in January.

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