Yikes: Eurozone’s unemployment rate hits a new high

posted at 5:21 pm on March 1, 2013 by Erika Johnsen

As Ed mentioned in his rundown of the Eurozone’s systemic problems earlier this week, Italy as a country just resoundingly voted in rejection of fiscal austerity, and their financial and economic outlook is looking pretty bleak — an outlook just made even bleaker by January’s record-high unemployment numbers released today. Via Reuters:

Italy’s seasonally adjusted unemployment rate jumped to 11.7 percent in January from 11.3 percent the month before to hit its highest level for at least 21 years, data showed on Friday.

The figure was above all forecasts in a Reuters survey of analysts which pointed to a marginal uptick to 11.3 percent. …

Both overall unemployment and youth unemployment were the highest since the current statistical series was begun in 1992.

And that’s not all. Italy’s increasingly poor economic performance combined with all of the Eurozone’s continued economic doldrums has pushed the 17-member bloc’s collective unemployment rate into new territory:

The unemployment rate in the euro zone edged up in January to a new record, official data showed Friday, as the ailing European economy continued to weigh on the job market. …

Unemployment in the 17-nation euro zone climbed to 11.9 percent in January from 11.8 percent the previous month, according to Eurostat, the statistical office of the European Union.

For the 27 nations of the Union, the jobless rate in January stood at 10.8 percent, up from 10.7 percent in December. All of the figures were seasonally adjusted. …

The jobless data “suggest that wage growth is set to weaken from already low rates” and further depress consumer spending, which has already been damped by government austerity measures, Jennifer McKeown, an economist at Capital Economics in London, wrote in a research note.

Europe did pretty well at convincing themselves that the worst of the European debt crisis was over, but was it really just the eye of the storm? These unemployment rates and the recently revised economic growth forecasts for 2013 aren’t going to make austerity measures any more welcome in the eyes of voters — and if Italy and Spain, the bloc’s third and fourth largest economies end up needing bailouts, it could very well spell extended troubles for the eurozone’s prospects, says Robert Samuelson:

The euro crisis is back. Actually, it never left. But there was an extended period, beginning last summer, when Europe’s political, business and media elites convinced themselves the worst had passed. The European Central Bank (ECB) — Europe’s Federal Reserve — had tranquilized jittery bond markets. …

But Italians did send a message. “The election wasn’t just anti-austerity. It was also anti-German,” says David Smick, editor of The International Economy magazine. “Berlusconi’s rhetoric was very anti-German. In Italian politics now, it’s dangerous to appear being the lapdog of [German Chancellor] Angela Merkel.” In one dazzling stroke, Italian voters rejected both Europe’s main response to high government debt — cut spending, raise taxes — and the policy’s most powerful architect, Germany’s Merkel. If Italy needs to be bailed out, the negotiations already look tortuous. …

The amounts required would dwarf the rescues of Greece, Portugal and Ireland. Agreement would be hardly guaranteed. As conditions for aid, the ECB and Germany have insisted on precisely the austerity and structural changes that Italian voters just rejected. Could Italy, backed by other debtor nations, force changes in old policies and, if not, what happens? Europe’s future remains in play.


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Comments

Lots of gloom and doom for years now. But nothing ever happens. Everybody is broke and in debt way past their ability to ever pay for it. Still, the sun rises in the east every morning and the world continued business as usual. The apocalypse is always just around the corner. Year after year after year.

keep the change on March 1, 2013 at 5:32 PM

What, exactly, do you want Obama to do about it? He’s not a dictator.

Besides, what difference , at this point, does it make.

Curtiss on March 1, 2013 at 5:32 PM

I think they need to raise taxes, increase Muslim and African immigration, spend more on public works projects, AND convert their economy to a jobs generating green economy.

That’ll do the trick?

Charlemagne on March 1, 2013 at 5:34 PM

What’s truly frightening is these countries think that they’ve actually tried austerity, when in reality they’ve only talked about austerity. Yes, pretty much like Obama.

HopeHeFails on March 1, 2013 at 5:35 PM

Good, and I hope that the same thing happens here.

Screw Europe.

Let the shit fly.

Let’s get it on.

OhEssYouCowboys on March 1, 2013 at 5:37 PM

Well dang, according to waters we will have 170m unemployed because of the nasty r’s not caving to bho?

Eurozone needs bho in charge to getter done right on the unemployment?
L

letget on March 1, 2013 at 5:37 PM

UNEMPLOYMENT is a Human Right! (or something)

Pork-Chop on March 1, 2013 at 5:47 PM

Headwind mind meld.

BKeyser on March 1, 2013 at 5:53 PM

The only thing that is preventing super inflation in the US due to printing of trillions of dollars is that Europe economy sucks much more than us… There is nowhere else to go and buy bonds on a large scale except in the US and hence the Feds can print the trillions of dollars…

mnjg on March 1, 2013 at 5:55 PM

I don’t know why they ever thought they needed a fund for sinking since they’re doing very well at that without funding it.

Dusty on March 1, 2013 at 6:01 PM

mnjg on March 1, 2013 at 5:55 PM

Exactly, that is why Peter Schiff has been wrong for the past 5 years with him predicting hyperinflation. Money always seeks the lesser of the evils. And since the whole civilized world is in the same debt boat, the money continues to flow to the US because, in the end, the US has the volume needed, and the military might to protect its interests.

keep the change on March 1, 2013 at 6:01 PM

Well you know what Europe needs?
Another guy like Hitler. ONly without the mustache.
And this time he won’t talk about the super race.
He’ll just talk about other dictatorial things.

Badger40 on March 1, 2013 at 6:03 PM

I think they need to raise taxes, increase Muslim and African immigration, spend more on public works projects, AND convert their economy to a jobs generating green economy.

That’ll do the trick?

Charlemagne on March 1, 2013 at 5:34 PM

Good plan. They might even try it.

SparkPlug on March 1, 2013 at 6:03 PM

The only thing that is preventing super inflation in the US due to printing of trillions of dollars is that Europe economy sucks much more than us… There is nowhere else to go and buy bonds on a large scale except in the US and hence the Feds can print the trillions of dollars…

mnjg on March 1, 2013 at 5:55 PM

That and the Federal Reserve buying Treasuries at artificially-low interest rates with their printed dollars, thus forcing everybody else who wants Treasuries to accept artificially-low interest rates.

Steve Eggleston on March 1, 2013 at 6:03 PM

keep the change on March 1, 2013 at 6:01 PM

Somewhere in your not-to-distant future there is a $5000 Ham Sandwich. I hope you remember this thread when you’re figuring out how to pay for it.

trigon on March 1, 2013 at 6:08 PM

That and the Federal Reserve buying Treasuries at artificially-low interest rates with their printed dollars, thus forcing everybody else who wants Treasuries to accept artificially-low interest rates.

Steve Eggleston on March 1, 2013 at 6:03 PM

Exactly…

mnjg on March 1, 2013 at 6:11 PM

The only way Europe can get out of its financial problems is to spend more money on infrastructure (high speed railroads and new government office buildings); increase the number and salaries of government employees ; raise the welfare payments to all incoming immigrants and raise taxes on anyone making over $35,000 to a 98% bracket.

I also believe it’s the decent and patriotic thing to raise American taxes so we can help them out. JUST KIDDING!!!!

MaiDee on March 1, 2013 at 6:13 PM

trigon on March 1, 2013 at 6:08 PM

If you understood how the financial markets work, you’d realize how that is an impossibility. The US Dollar, like any other dollar, gets its value not from the US balance sheet, but from the only two major competitors; the Euro and British Pound. Unless those societies dump socialism and become everything they are not, the US dollar can never experience hyperinflation.

keep the change on March 1, 2013 at 6:13 PM

Exactly, that is why Peter Schiff has been wrong for the past 5 years with him predicting hyperinflation. Money always seeks the lesser of the evils. And since the whole civilized world is in the same debt boat, the money continues to flow to the US because, in the end, the US has the volume needed, and the military might to protect its interests.

keep the change on March 1, 2013 at 6:01 PM

It is great that we have the strongest military in the world… Of course liberals are too stupid or do not care about the super disaster that would happen to us and the entire world if we do not have the strongest military on Earth…

mnjg on March 1, 2013 at 6:13 PM

the US dollar can never experience hyperinflation.

keep the change on March 1, 2013 at 6:13 PM

You’re joking, right?

trigon on March 1, 2013 at 6:49 PM

This is the part where the deadbeat borrowers attempt to lecture their German lenders on fiscal prudence.

stout77 on March 1, 2013 at 7:18 PM

On the bright side, a temporary societal breakdown would lead to rooting out all the perceived ills in said society. A blood red cleansing breath.

Woe unto Islam.

BL@KBIRD on March 1, 2013 at 7:40 PM

Hey Eurodudes, so the magnetic strip is wearing thin…

Just try a different card.

WryTrvllr on March 1, 2013 at 7:49 PM

Lots of gloom and doom for years now. But nothing ever happens. Everybody is broke and in debt way past their ability to ever pay for it. Still, the sun rises in the east every morning and the world continued business as usual. The apocalypse is always just around the corner. Year after year after year.

keep the change on March 1, 2013 at 5:32 PM

And, unexpectedly to liberals, the fertility rates in western civilization continue to plummet as the young cannot crawl out from under the debt the socialists have piled on them.

Different century, same ole Shiite \

WryTrvllr on March 1, 2013 at 7:54 PM

If you understood how the financial markets work, you’d realize how that is an impossibility. The US Dollar, like any other dollar, gets its value not from the US balance sheet, but from the only two major competitors; the Euro and British Pound. Unless those societies dump socialism and become everything they are not, the US dollar can never experience hyperinflation.

keep the change on March 1, 2013 at 6:13 PM

So…when we adopt socialism, abandon property rights, socialize medicine, reward failure, vacate our international security promises and raise taxes to punitive highs…………..success??

WryTrvllr on March 1, 2013 at 8:00 PM

Exactly, that is why Peter Schiff has been wrong for the past 5 years with him predicting hyperinflation. Money always seeks the lesser of the evils. And since the whole civilized world is in the same debt boat, the money continues to flow to the US because, in the end, the US has the volume needed, and the military might to protect its interests.

keep the change on March 1, 2013 at 6:01 PM

Hmmm….Foreign purchases of Treasuries are down. Way down. They are less than 50% of Treasury Bond sales now. The Fed is buying Treasuries, not the foreigners.

US dollars are going to the Euro-dollar markets, City of London, etc., but these are short-term deals and eventually that money will come back to US banks and be spent.

What happens then?

http://www.marketoracle.co.uk/Article26216.html

Dreadnought on March 1, 2013 at 11:12 PM

The price I charge for my product has doubled in the last six years, but there is no inflation…keep dreaming.

wheelgun on March 2, 2013 at 6:21 AM

Yikes: Eurozone’s unemployment rate hits a new high

Oh my gosh…already yawning and trying to wake up before my first cup of coffee and now this. I’ll never wake up today. :-(

Dr. ZhivBlago on March 2, 2013 at 9:27 AM