Although it seems routine, rising euro zone unemployment is still shocking

May 31, 2013

 

Another month, another rise in the number of jobless in the euro zone.

As expected, the unemployment rate hit a new record 12.2 percent in April, according to Eurostat on Friday, meaning someĀ 19,375,000 euro zone citizens are out of work.

That’s more than the populations of Austria and Belgium combined and almost a quarter are aged under-25.

However, it’s worth remembering that not so long ago, hardly any economists expected to see unemployment climb to these levels.

Take October’s Reuters poll:

  • Not one of 27 economists predicted the unemployment rate would hit 12 percent in the first quarter of this year. As it happened, it averaged slightly above that.
  • Only two economists — from Capital Economics and HSBC — thought euro zone unemployment would average above 12 percent in the current quarter, which now looks a certainty.

“The situation in the periphery remains particularly dire, but note that the number of unemployed rose even in Germany,” said James Howat, European economist Capital Economics, on Friday’s data.

Coupled with inflation that’s still well below the European Central Bank’s target ceiling near 2 percent, Howat said this will add to the pressure to provide more policy support — even if no-one expects any big announcements at the ECB meeting next Thursday.

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