November preliminary: 10.1%
Previous: 10.1% Oct, 10.0% Sep, 10.0% Aug, 10.0% Jul, 10.0% Jun
FRANKFURT (MNI) – The Eurozone unemployment rate stabilized in
November at 10.1% in line with analysts’ expectations, seasonally
adjusted data from Eurostat showed Friday.
After an upwardly revised increase of 96,000 in October, the
unemployment rolls decreased by 35,000 in November, the first dip since
August, lowering the jobless total to 15.924 million — still an
increase of 347,000 versus one year ago. For young people under 25, the
jobless rate increased by 0.2 point to 20.7%.
Among larger countries, unemployment in Germany stabilized in
November at 6.7%. National data, which are measured differently, showed
unemployment surprisingly rising very slightly in December, its first
increase since June 2009. Experts attributed the surprise increase to
harsh weather in December and suggest that the labor market in the
Eurozone’s largest economy remains robust.
Indeed, the Ifo institute’s Employment Barometer for Germany hit a
new all-time high last month. “On the whole, 2010 was a good year for
the German labor market,” Ifo said, adding that “the outlook on the
labor market remains very good.”
French unemployment rose 0.1 point to 9.8% in November, Eurostat
reported. National data showed that registered jobseekers rose by just
over 21,000 in November. Nevertheless, the recovery in hiring over the
past year and fluctuations in new jobseekers in recent months augur that
unemployment is close to peaking.
After a 0.3 percentage point rise in October, Italian unemployment
stabilized in November at 8.7%. Most firms surveyed by the research
institute Isae in December expected the labor market to stabilize or
improve in the months ahead and consumers were on balance optimistic as
well.
Spain remains the Eurozone’s problem child with respect to
unemployment. Still, the jobless rate held steady for the third straight
month at 20.6%. Especially disturbing is youth unemployment, which is at
a jaw-dropping 43.6%. The lowest rates of youth unemployment are in the
Netherlands and Germany and at 8.4% and 8.6% respectively.
The lowest total unemployment rates in November were in the
Netherlands (4.4%), Luxembourg (4.8%), and Austria (5.1%).
The Eurozone labor market has broadly stabilized in recent months
following a rapid rise in joblessness between early 2008 and late 2009.
While jobs are not being shed as they once were, the European
Commission predicted in late November a jobless recovery and overall
high unemployment for some time to come.
The Commission sees employment increasing by 0.3% this year and
0.4% next year, after drops of 2.0% in 2009 and 0.7% in 2010. This would
mean an average jobless rate of 9.6% in 2012, after 10.0% this year.
Perhaps more worrying, the crisis will leave structural unemployment at
a higher level, thereby dampening potential growth, it predicted.
Some leading indicators are more encouraging. For example, the
hiring index component of the Eurozone’s manufacturing PMI in December
reached its highest level in over ten years (53.8).
As usual, aggregate PMI data masked significant differences among
member states. While jobs were created in Germany and France, Italy,
Spain and Ireland were shedding positions in the year’s final month,
especially in the service sectors, research firm Markit noted. But on
the manufacturing side, Italy and Ireland actually added positions.
Other survey data also point to manufacturing being a stronger
source of job growth in coming months than services. Eurozone employment
expectations in manufacturing increased in December for the fourth
straight month, matching the series all-time high (in November 2000),
the European Commission sentiment survey showed. The improvement was
broad-based, with the index rising in all major countries.
Still, capacity utilization in manufacturing is, in aggregate, not
yet back at its long-term average, suggesting that companies still have
room to ramp up existing capacity before expanding staff.
Among larger Eurozone states, Germany’s manufacturing industry is
closest to its long-term average of capacity utilization, only 0.5 point
short, while France, Italy and Spain remain further behind.
Eurozone employment expectations in services, by contrast, eroded
slightly in December after three months of improvement, the survey
showed.
Recent PMI data confirm a slight weakening in hiring in services.
Again, there are divergences, with core Europe showing a slowing of
expansion, while in some peripheral countries the shedding of jobs is
intensifying.
While the German PMI services employment index for December was
revised up 1.6 points from the flash estimate to 56.1, it remains 0.6
point below November’s reading. The French index was revised up 0.2
point, but at 51.9 is still 1.3 points below November’s total.
The December service PMIs were more discouraging for Italy and
Spain. In Italy, the employment index dropped below 50, the borderline
between expansion and contraction; in Spain the index fell further below
50.
Failure of services employment to rebound at the same pace of
industry may reflect the lingering effects of the severe financial
crisis and the fact that services are benefitting less than industry
from the dynamism of emerging economies. For example, German
manufacturing orders skyrocketed 5.2% in November, largely on the back
of double-digit growth in orders from outside of the Eurozone.
Among smaller countries not yet mentioned, the lowest unemployment
was seen in Malta (6.3%), followed by Cyprus (7.2%), Slovenia (7.5%),
Finland (7.9%) and Belgium (8.3%). At the higher end were Portugal
(11.0%), Ireland (13.9%) and Slovakia (14.5%).
–Frankfurt bureau; +49-69-720142, tbuell@marketnews.com
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