February preliminary: 10.8%

MNI survey median: 10.8%
MNI survey range 10.7% to 10.8%

Previous: Jan 10.7%, Dec 10.6%, Nov 10.5%, Oct 10.4%, Sept 10.3%

PARIS (MNI) – Much as expected, the Eurozone unemployment rate
ticked higher in February for the eighth month in a row to a new high of
10.8%, according to seasonally adjusted data released Monday by
Eurostat.

The number of unemployed rose by 162,000 to 17.134 million,
somewhat less than in January and the average monthly rise over last six
months, giving an increase of 1.476 million on the year.

The jobless tide will continue to mount in the months ahead as
economic activity stagnates, thereby dampening consumption and
accentuating the cyclical downturn. The March PMI polls showed
employment contracting somewhat faster than in the first two months of
the year, with industry jobs falling at the quickest clip in two years.

Hiring intentions in industry as measured by the European
Commission eroded further in March and fell sharply in construction. In
the retail and services sectors, by contrast, there was a modest
recovery.

Germany is likely to remain one of the few sources of Eurozone job
gains in coming months. The jobless rate there was stable in February at
5.7% for the fifth month in a row. National data show a monthly payroll
rise of 40,000 and for March a jobless drop of 18,000, enough to trim
the rate by 0.1 point.

Yet even Germany’s labor market will lose some steam this year as
economic growth slows, a study by the national Labor Agency suggests.
After a drop of 270,000 last year, unemployment would fall by an average
of 50,000 this year, assuming GDP growth of 1.0%. Most of that decline
would come from the statistical carryover of this year’s reduction.

In France, the unemployment rate was also unchanged in February at
10.0%. National data showed the number of registered jobseekers seeking
full-time work rising for the tenth month in a row, but at the slowest
pace since August.

Leading indicators suggest the slowing trend in French unemployment
will not last. The PMI polls showed employment expanding marginally
until March, when industry jobs declined slightly and services jobs
stagnated. Hiring prospects remain unfavorable in all key sectors except
wholesaling, according to the surveys by the national statistics
institute Insee, which expects another 49,000 private sector jobs to be
lost in the first half of this year.

In Spain, where the meltdown in employment had been the most
dramatic, the jobless rate jumped 0.3 point to 23.6% for a rise of three
full points over the past 12 months. The rate for those under 25 surged
by 0.6 point to 50.5%.

While recent PMI polls suggest the pace of downsizing in Spanish
industry and services has slowed somewhat of late, the Commission’s
survey showed a further erosion in industry hiring intentions in March
and a setback in all other sectors. Last month Economy Minister Luis de
Guindos projected a net loss of 620,000 jobs this year, which would lift
the unemployment rate to 24.3%, assuming a 1.7% contraction in GDP.

Italy’s jobless rate rose 0.2 point in February to 9.3%. Youth
unemployment was up 0.9 point to 31.9%.

Employment expectations of Italian firms have recovered somewhat in
all sectors recently, Istat’s surveys shows. But with the PMI employment
index at a low 47.3 in February, this points to more downsizing ahead.
Services payrolls were cut at the fastest pace in over two and half
years, and the March factory PMI signaled a slightly faster decline in
employment.

Among the other reporting Eurozone countries, jobless rates were
stable in February in Malta (6.8%), Belgium (7.2%), Slovenia (8.7%)
Slovakia (14.0%) and Ireland (14.7%). Monthly increases of 0.1 point
were reported for Austria (4.2%) and Luxembourg (5.2%) and of 0.2 point
for Cyprus (9.7%) and Portugal (15.0%). Monthly declines of 0.1 point
were reported for Finland (7.4%) and the Netherlands (4.9%). The latest
available results for Greece show a rate of 21.0% in December.

–Paris newsroom +331 4271 5540; e-mail: ssandelius@marketnews.com

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