Eurozone unemployment rate hits decade-high 9.2 per cent

Unemployment in the 16-nation eurozone rose to 9.2 per cent of the workforce in April, the highest level this decade as the recession hit consumers and industry, official EU data showed on Tuesday.

A total of 396,000 jobs were lost during the month in the nations using the euro currency, pushing unemployment past the nine-per cent barrier and up to its highest level since September 1999, the European Union's Eurostat data agency said.

For the 27-nation EU as a whole, the unemployment rate rose to 8.6 per cent in April, up from 8.4 per cent in March and the highest level since January 2006, as the recession took its toll.

Eurostat estimates that 20.825 million men and women in the EU, including 14.579 million in the euro area, were unemployed in April.

Eurozone unemployment thus increased for a 13th successive month in April and the rise was "worryingly steep," according to Howard Archer, chief European economist at IHS Global Insight in London.

He recalled that as recently as the first quarter of last year eurozone unemployment rate was running at 7.2 per cent.

"Deep and extended economic contraction, depressed business confidence and deteriorating profitability is currently increasingly feeding through to push unemployment up sharply across the eurozone," said Mr Archer.

"Although there are mounting signs that the rate of economic contraction across the eurozone is moderating appreciably and business confidence has risen from the record low levels widely seen in March, this is unlikely to prevent unemployment from rising substantially further," he added gloomily.

The bloc figures hide a massive diversity in national statistics, with the jobless rate ranging from just three per cent in The Netherlands and 4.2 per cent in Austria to 16.8 per cent in Lithuania, 17.4 per cent in Latvia and 18.1 per cent in Spain, according to Eurostat.

At the same time the Spanish employment ministry reported that national unemployment fell in May for the first time for 12 months, though remaining at a huge 17.36 per cent.

Spain has been particularly hard hit by the recession, owing to the economic crisis of recent months, with unemployment more than doubling in a year after the end of a decade-long boom driven by the construction industry.

Austria too recorded a decline in joblessness last month, with the rate slipping to 6.6 per cent from 7.1 per cent in April, official data showed.

From April last year to April this year only two EU nations - Greece and Romania - reported a fall in their unemployment rates while the other 25 member states saw their jobless rates rise.

"Although survey measures of hiring intentions have ticked up lately, they still point to very sharp falls in employment to come, suggesting that the labour market downturn has much further to run," opined Jennifer McKeown, European economist at Capital Economics.

"The only hope is that, as and when other areas of the economy recover, consumers will dig into their savings to support spending," she added.

Last month Jean-Claude Juncker, Luxembourg's PM and the chairman of the Eurogroup of finance ministers, warned that the economic and financial crisis risks morphing into a social crisis.