December preliminary: 10.4%
MNI survey median: 10.4%
MNI survey range: 10.3% to 10.4%
Previous: 10.4% Nov (10.3%), 10.3% Oct, 10.3% Sep, 10.2% Aug, 10.1% Jul
PARIS (MNI) – The Eurozone unemployment rate stabilized in December
at November’s record high of 10.4%, as the monthly increase slowed to
weakest pace in eight months, according to seasonally adjusted data
released Tuesday by Eurostat.
The number of unemployed rose by just 20,000 to 16.469 million,
compared to an average monthly increase of 124,000 over the previous
five months. This slowdown may be due to the rather clement weather in
some countries, which favored outdoor activity, notably in construction.
(For several countries, including France, more complete data from
the 4Q labor force survey are not yet available, which could lead to
later revisions.)
From its previous peak in May 2010, unemployment in the Eurozone
had declined by only 435,000 before it began rising again a year later.
The jobless tide is likely to swell faster in the months ahead as
activity slumps, thereby dampening consumption and accentuating the
cyclical downturn. The January PMI polls showed employment down slightly
(49.4) after stagnating in previous months.
While employment expectations as measured by the European
Commission recovered in most key sectors except for retailing in
January, they remained below average outside of industry. Given the
usual cyclical lags, it is probably only a matter of time before most
firms begin to lighten payrolls.
The OECD expects Eurozone employment to contract by 0.3% this year,
more than retracing last year’s upturn, before recovering by 0.2% in
2013. The jobless rate would jump from an average of 9.9% in 2011 to
10.3% this year and stabilize next year.
Germany is likely to remain one of the few sources of Eurozone job
gains in the months ahead. Here the jobless rate fell another 0.1 point
in December to 5.5%, down 1.1 points on the year. National data for
January showed a further drop of 34,000 — enough to trim the rate
another 0.1 point.
Yet even Germany’s labor market will lose some steam next 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 rose 0.1 point on the month to 9.9%,
according to Eurostat. National data showed that the number of
registered jobseekers seeking full-time work rose by nearly 30,000 again
in December, giving a rise of 120,000 since August.
French industry began shedding short-term employees in the third
quarter as production contracted further. Retailers canvassed earlier
this month by Insee expected a slowdown in new hiring in the coming
months. Wholesalers and service providers foresaw few or no new jobs,
while builders anticipated further layoffs.
In Spain, where the meltdown in employment had been the most
dramatic, the jobless rate was unchanged in December at 22.9% — by far
the highest in the Eurozone. The rate for those under 25 stabilized as
well at 48.7%.
While near-term employment expectations of Spanish firms improved
in most sectors in January, apart from retailing, they remained far
below average, especially in construction.
Italy’s jobless rate rose 0.1 point in December to 8.9%. Here
again, January brought a recovery in hiring expectations in industry,
the services and construction, but only to sub-par levels, according to
the Commission. Employment prospects in retail eroded further.
Among the other reporting Eurozone countries, only Slovakia posted
a small monthly decline in the jobless rate (to 13.4%). Rates were
unchanged on the month in the Netherlands (4.9%), Austria (4.1%),
Finland (7.6%), Slovenia (8.2%) and Malta (6.5%).
Elsewhere, the jobless rate rose by 0.1 point in Ireland (14.5%),
by 0.2 point in Belgium (11.2%), by 0.3 point in both Luxembourg (5.2%)
and Cyprus (9.3%) and by 0.4 point in Portugal (13.6%).
–Paris newsroom +331 4271 5540; e-mail: ssandelius@marketnews.com
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