European Crisis: Number Of Unemployed In Eurozone Hits Record High
The number of unemployed people in the eurozone reached its highest level since the creation of the euro in 1999, according to The Financial Times, stoking recession fears.
The number of unemployed people in the eurozone rose 0.3 percent in November to a record high of 16.37 million, according to Eurostat, the European Commission's statistics office. Economic sentiment, a measure which includes consumer and business confidence, fell 0.9 percent, and retail sales in the eurozone plunged 0.8 percent in November, according to the European Commission.
"Today's batch of Eurozone data has recession written all over it," ING economist Martin van Vliet wrote in a note to clients. "The escalating debt crisis, fears of a new recession and fiscal austerity measures clearly took their toll on consumer spending intentions in the past quarter."
The most recent data reinforces concerns that the eurozone has entered a recession and will stay in it at least until the middle of 2012. ING forecasts that the eurozone economy shrank 1.8 percent between October and December of 2011 and that it will shrink another 1.7 percent during the first three months of 2012.
The data also indicated that the difference in economic fortunes between stronger and weaker European countries remains stark. While the unemployment rate actually declined to 5.5 percent in Germany and 4.0 percent in Austria in November, it rose one percent to 22.9 percent in Spain and remained at 18.8 percent in Greece, according to Eurostat.
Still, austerity measures in Greece, Italy, and Spain are taking their toll on European countries with more stable economies. Retail sales plunged 0.9 percent in Germany and Finland in November, according to Eurostat. Even the United Kingdom, which is not on the euro, is suffering: retail sales there fell 0.4 percent.
Meanwhile, economic sentiment plunged even more in the 27-country European Union than in the 17-country eurozone, suggesting that the risk of recession is spreading. Confidence in the financial industry fell most steeply -- 2.5 points in the European Union and 4.9 points in the eurozone -- as Europeans continued to worry about the health of their banks, which hold large amounts of troubled government debt. Consumer sentiment also fell 1.2 points in the EU. Economic sentiment is below its long-term average in all eurozone countries except for Germany, according to Eurostat.