Eurozone unemployment rate rose to a record high in February, reflecting increasing divergences between countries.
The seasonally adjusted jobless rate rose to 10.8 percent, the highest since 1997, from 10.7 percent in January, data from Eurostat showed Monday. The outcome was in line with economists' forecast. The rate was 10 percent in February 2011.
Companies reduced hiring to contain cost and squeezed margin amid rising oil prices. IHS Global Insight Chief Europe Economist Howard Archer expects the jobless rate to rise significantly higher as the economy likely having suffered a reduction in GDP amid weak business sentiment.
It now looks odds-on that the Eurozone unemployment rate will move above 11 percent in 2012, Archer added. Nearly 17.13 million people are unemployed in the 17-nation bloc. Compared with January, the number of unemployed increased by 162,000 in the euro area. Annually, unemployment rose by 1.476 million.
Spain continued to log the highest unemployment rate of 23.6 percent, followed by Greece with 21 percent. The lowest rates were seen in Austria, the Netherlands, Luxembourg and Germany.
In the EU27, the jobless rate was 10.2 percent in February, compared with 10.1 percent in January.
Compared with a year ago, the unemployment rate fell in eight member states, increased in eighteen and remained stable in Romania.
The unemployment rate for males increased to 10.7 percent in February from 9.7 percent a year ago. Likewise, the female unemployment rate rose to 11 percent from 10.3 percent.
ING Bank Economist Martin van Vliet said the high level of unemployment will limit the potential for above-target inflation driven up by oil prices to feed through into higher wages. Accordingly, the European Central Bank will not be over concerned about stickier inflation and keep its interest rates extremely low for an extended period.
by RTT Staff Writer
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