Unemployment in euro area hits new record high of 12.2%
As the 17 countries that make up the euro area continue to be mired in a lengthy recession, the unemployment rate in the area was 12.2 per cent in April, an increase on the 12.1 per cent reported in March. This is the highest since the data series...
As the 17 countries that make up the euro area continue to be mired in a lengthy recession, the unemployment rate in the area was 12.2 per cent in April, an increase on the 12.1 per cent reported in March. This is the highest since the data series started in 1995.
In the meantime, Eurostat reported that the region’s recession continued in the first quarter of the year, as it confirmed a previous estimate that the economy contracted by 0.2 per cent in the first quarter compared with the previous quarter. On a year-on-year basis, growth was revised down from -1 per cent to -1.1 per cent.
In the UK, during May, the manufacturing sector grew at the fastest pace in over a year as the Purchasing Manager’s Index (PMI), as published by Markit/ CIPS, rose to 51.3 from an upwardly revised 50.2 in April. This is more than a full percentage point higher than the consensus forecast.
April’s PMI was originally below the 50-mark that divides growth from contraction. It is also the second consecutive month of expansion in the sector and will underpin hopes that Britain’s recovery is becoming more broad-based and does not depend entirely on the services sector.
It will also add weight to the Bank of England’s decision to wait before loosening its monetary stance any further. Separately, UK services growth accelerated more than forecast last month as the gauge reached the highest level in 14 months to 54.9 from 52.7 in April.
Finally, in the US, the Institute for Supply Management’s (ISM) factory index declined to 49 in May, the lowest reading since June 2009. This news comes in the wake of across-the-board Federal budget cuts in the US and overseas markets that are struggling to recover from the deepest recession since the 1930s.
Separately, the ISM non-manufacturing index rose to 53.7 from 53.1 in April. The industries that comprise the non-manufacturing sector in the US make up almost 90 per cent of the economy.
This article was compiled by Bank of Valletta for general information purposes only.