March: 10.0%

MNI survey median: 10.0%
MNI survey range: 10.0% to 10.1%

Previous: 10% Feb, 9.9% Jan, 9.9% Dec, 9.9% Nov, Oct 9.8%

FRANKFURT (MNI) – The Eurozone jobless rate remained unchanged at
10% in March, stabilizing at the highest level since August 1998,
according to seasonally adjusted data released Friday by Eurostat.

The monthly increase in the number of unemployed accelerated to
101,000 from 55,000 in February after 105,000 in January and 41,000 in
December. The total number of unemployed in February was 15.808 million,
some 1.389 million more than a year earlier.

Going forward, unemployment should rise further but might remain
far below the levels previously suggested by the sharp contraction in
economic activity.

Boosted by government support schemes, employment has dropped only
half as much as economic activity, suggesting that companies will have
to continue to adjust their staff levels to the new realities.

Labor agency officials from Germany — which pioneered many of the
support schemes — warned that companies may soon no longer be able to
use government schemes to avoid layoffs to the same extent as before.

However, recent indicators suggest that the pace of layoffs should
slow in the months ahead and may indeed stabilize much sooner than
previously expected.

According to April’s flash PMI, employment expectations in the
Eurozone’s manufacturing and services sectors contracted at a slower
pace and almost hit the 50-point mark that would signal no further
lay-off plans. The sub-index for employment rose to 49.5 points from
48.5 in manufacturing and to 49.5 points from 48.9 in services.

The European Commission’s survey also offered some encouraging
signals. The employment expectations balances of all business sectors —
industry, services, retail and construction — showed improvement in
March.

In manufacturing, employment expectations have hit their long-term
average (-13); in retailing expectations remained only marginally below
the long-term average (-1 vs -2), while in the construction sector the
current index stands 4 points below the long term average of -9.

According to Eurostat data, the stabilization of the unemployment
rate in March was supported by a drop in the German rate and an
unchanged rate in France.

In Germany, the unemployment rate dropped to 7.3% from 7.4% making
it the only Eurozone country to report a decline, Eurostat said.
National data signalled further improvement next month. According to the
German labor agency, 68,000 workers left the ranks of the unemployed in
April, pushing the seasonally adjusted jobless rate down to 7.8%.

Nevertheless, the agency expects unemployment to rise to an average
of 3.5 million in 2010 as compared to the current level of 3.285
million.

In France, the unemployment rate remained stable at 10.1% in March,
the release showed. According to the French employment agency Pole
Emploi, the number of registered jobless seeking full-time employment
dropped 6,600, or 0.2%, in March – a clear sign of improvement in labor
market conditions, though the total jobless figure was still up 9.8%
from a year earlier.

An employment survey by Pole Emploi underscores this brighter
outlook. It projects an increase in unemployment of only 135,000 in
2010, compared with a rise of 593,000 last year.

For 2011 it expects the trend of rising unemployment finally to be
reversed, with the number of jobless dropping by 57,000 on the year.
Prime Minister Francois Fillon said earlier this month that “all”
forecasters expect a reversal of the jobless rise in the second half of
this year.

In Spain, March’s unemployment rate rose to 19.1% from 19.0%,
according to Eurostat. National data, accidentally released by
statistics institute INE ahead of schedule, showed the unemployment rate
hit 20.5% in the first quarter this year, more than twice the Eurozone’s
average. The figures underscore that Spain is now the last major economy
still in recession.

However, Prime Minister Jose Luis Rodriguez Zapatero suggested
Tuesday that unemployment would begin to decline “slightly” in April.
“We should see a positive trend in the coming months,” he told the
Senate.

On the other end of the spectrum, Eurozone’s countries with the
lowest unemployment rates were the Netherlands (4.1%) and Austria
(4.9%).

–Frankfurt bureau: +49-69-720 142, email: frankfurt@marketnews.com

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