Monday, October 22, 2012

Eurozone: Unemployment Rises to 11.4% in August, 12% Likely in 2013


According to the European statistics agency, Eurostat, unemployment across the 17-nation eurozone hit a record of 11.4% in August effective today (October 22) amid concern that unemployment could reach 12% in 2013.

Unfortunately, Europe’s problems are continuing to drag down the entire global economy, particularly considering that the region is the US's largest export customer. Thus, any fall-off in demand will hit American companies. Six countries in the EU are in recession: Greece, Spain, Italy, Cyprus, Malta and Portugal. 

Greece and Spain have the highest unemployment rates in the eurozone at roughly 25% each.  

COMMENT: Tens of thousands of people poured into the streets of Madrid, Lisbon and Paris this weekend to protest austerity. In Spain and Greece last week, demonstrations descended into violence as protesters clashed with riot police. 

Unfortunately, though, despite public sentiment against austerity measures, Europe has few options but to reduce entitlements and public budgets. Few economists see a bright future in the short-term. 

And, as with most downturns, high employment usually correlates into increased economic crime.