Unemploymentin the eurozone hits record high
As the EU debt crisis pushes the European economy towards recession, the eurozone unemployment rate hit 11.4 per cent in August. The June and July figures were also both revised higher to 11.4 per cent. This is the region’s highest unemployment rate since compilation of the data series began in 1995 by the EU’s statistics office. Worryingly, this negative trend is now also being seen in core countries like Germany, which so far had seemed relatively unaffected.
Meanwhile, according to property analysts Hometrack, in September house prices in the UK fell for the third consecutive month as weakening demand weigh on property values. House prices fell 0.1 per cent in September from the previous month, the same fall as in July and August. Home prices have dropped 0.5 per cent on a year-on-year basis.
These latest disappointing property figures were published as the UK Government tries to encourage mortgage lending. The Bank of England’s record low interest rate policy is also meant to support home-buying, with interest rates being kept on hold at the latest monetary policy meeting held by the bank last week.
Meanwhile, following August’s strong monthly rise, the manufacturing Purchasing Managers’ Index fell in September to 48.4 from 49.6 previously, as new orders, especially from key export markets, slowed.
Finally, in the US, after three months of contraction, the manufacturing sector unexpectedly expanded in September, with the Institute for Supply Management factory index rising to 51.5 from 49.6 in August. Readings above 50 indicate expansion, and the September figure exceeded the most optimistic forecast by a Bloomberg News survey.
The rise was supported by stronger orders and eases concerns that the US economy will slow further. Resilience in car sales and a rise in demand for home construction materials are sheltering the manufacturing sector from weaker exports and a fall in business investment.
This report was compiled by Bank of Valletta plc for general information purposes only.