Unemployment in the 27-member European Union increased from 10.8 percent in January to 10.9 percent in February, according to Eurostat, the statistical office of the European Union. In the 17-member euro area, the seasonally-adjusted unemployment rate was 12.0 percent, a dramatic increase from 10.9 percent in the year-ago period.
Although the data is for February, it seems to foreshadow a worsening of conditions in March. Unemployment in Cyprus increased from 10.2 percent to 14.0 percent year over year, ahead of the messy bailout that was orchestrated there. With the nation’s second-largest bank closing, major depositors sustaining tremendous losses, and economic sentiment on edge, the rate of unemployment in the country could very well have increased in March and could continue to increase in April.
Compounding Europe’s struggling labor market is the Markit Eurozone Manufacturing PMI report for March, which was also released on Tuesday morning. The report’s index of overall business conditions decreased from 47.9 in February to 46.8 in March, a three-month low…
“Companies reported that signs of stronger demand from markets such as Asia and the US were countered by a renewed weakening of demand within the euro area, in turn reflecting deteriorating business and consumer confidence,” commented Markit Chief Economist Chris Williamson.
Greece’s PMI fell to a two-month low of 42.1, while Spain’s fell to a five-month low of 44.2. Germany’s PMI hit a two-month low of 49.0. Any reading below a 50 indicates contraction. So not only are euro zone manufacturing conditions poor, they are getting worse, according to the PMI data.
Among the EU member states, Greece retained the highest rate of unemployment at 26.4 percent in February, up from 21.4 percent in the year-ago period. Spain’s unemployment rate, the second highest, increased from 23.9 to 26.3 percent. Germany’s unemployment remained relatively low at 5.4 percent.