Eurozone unemployment reached a record high in April as companies reduced headcount to limit costs amid fears of recession.
The jobless rate came in at 11 percent in April, the same rate as seen in March, Eurostat said Friday. It also matched economists' expectations. The rate for March was originally reported as 10.9 percent.
A record 17.4 million were unemployed in the euro area. Compared with March, the number of unemployed increased by 110,000 in April. The increase in unemployment is set to weigh on consumer spending.
IHS Global Insight Chief UK economist Howard Archer sees the unemployment rate moving significantly higher. It now looks odds-on that the jobless rate will reach 11.5 percent by the end of the year, although the situation will vary markedly between countries, he said.
In the EU27, the jobless rate was 10.3 percent in April, slightly up from 10.2 percent in March. There was wide disparities between member nations.
The lowest unemployment rates were recorded in Austria, Luxembourg and the Netherlands. Spain has the highest rate of unemployment, at 24.3 percent, followed by Greece and Latvia.
The unemployment data provides a sober reminder that the Eurozone economy is in desperate need of a more expansionary policy stance, said ING Bank NV's Martin van Vliet.
This likely means a combination of a less contractible fiscal thrust, a more expansionary monetary policy, and a much weaker exchange rate, the economist added.
Policymakers of the European Central Bank will meet on June 6. In May, the Governing Council led by Mario Draghi kept the interest rates unchanged for the fourth month in a row. The key rate remains at a record low 1 percent.
Elsewhere today, Italy's statistical office ISTAT reported that the country's unemployment rate increased to its highest level in more than eight years in April. The jobless rate rose to 10.2 percent from 10.1 percent in March. The number of unemployed totaled 2.615 million, rising by 38,000 from March and by 621,000 from a year ago.
by RTT Staff Writer
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