The euro-area jobless rate rose to a record in October as the fiscal crisis and tougher austerity measures deepened the region’s economic woes.
Unemployment in the 17-nation single-currency bloc increased to 11.7 percent from 11.6 percent in September, the European Union’s statistics office in Luxembourg said today. That’s the highest since the data series started in 1995 and is in line with the median estimate of 34 economists in a Bloomberg News survey. Inflation eased to 2.2 percent in November, the slowest rate in almost two years, separate data showed.
The euro-area economy has shrunk for two successive quarters, forcing companies to cut costs to help weather the downturn, and economists foresee a further contraction of 0.3 percent in the fourth quarter, the median of 25 forecasts in a separate Bloomberg survey showed. The Organization for Economic Cooperation and Development this week forecast contractions of 0.4 percent and 0.1 percent this year and next.
“The trend remains a gradual upward trend before we can hope for some stabilization in the second half of next year,” said Frederik Ducrozet, senior euro-area economist at Credit Agricole in Paris. “There’s no escaping the fact the unemployment rate will rise again in the next year; it’s a lagging indicator.”
