2023-11-03 11:57:00
The unemployment rate in the euro zone rose by 0.1 point in September over one month, to 6.5% of the working population, following a historic low the previous month, according to Eurostat data, published this Friday November 3.
As a reminder, the indicator was established in August at 6.4%, a level already recorded in June and which constitutes its lowest level since the European Statistics Office began to compile this series, in April 1998, for countries that have adopted the single currency. For the European Union as a whole, the unemployment rate rose to 6% in September, exactly the same level as in June, July and August, Eurostat said.
Spain and Greece record the highest rates
Unemployment has fallen significantly in Europe since mid-2021, thanks to the strong post-Covid economic recovery which followed a historic recession due to the pandemic. Despite a stagnation of economic activity in the euro zone from the end of 2022, fueled by the consequences of the war in Ukraine and the surge in inflation, unemployment continued to decline before stabilizing since the spring at a unprecedented level in a quarter of a century.
Despite everything, Portugal saw its unemployment rate increase to 6.5% in September, compared to 6.2% the previous month. Same story in Italy (7.4% in September). The unemployment rate reached 7.3% in France, unchanged from August. It stood at 3% in Germany, as in the previous four months. The lowest rates in the EU were recorded in the Czech Republic (2.7%), Malta (2.8%) and Poland (2.8%). The highest were recorded in Spain (12%, up 0.1 points over one month) and Greece (10%, down 0.6 points).
In Germany, an increasingly struggling labor market
The unemployment rate in Germany increased for the first time in five months in October, the persistent weakness in activity in Europe’s largest economy slowing the dynamism of its labor market, the Employment Agency said on Thursday. In raw data, the number of unemployed reached 2.61 million people, or around 165,000 more than in October 2022.
« The German economy has been more or less at a standstill for a good year now, which is not without visible consequences on the labor market. », Commented the Director General of the Federal Employment Agency, Andrea Nahles, in a press release. Even if ” given economic data, it is holding up relatively well », she puts things into perspective.
The region’s performance remains penalized by the gloomy economic situation in Germany, Europe’s largest economy. German GDP fell by 0.1% in the third quarter, following having virtually stagnated in the first half of the year. Germany, where industry plays a crucial role, is penalized by the surge in energy prices, increases in interest rates and the weakening of important export markets, led by China.
A contraction of the economy throughout the euro zone
In the third quarter, the euro zone economy contracted, notably due to Germany’s difficulties and the rise in interest rates. Even if inflation continues to run out of steam, the specter of a recession hangs over the countries of the zone. And for good reason, the gross domestic product (GDP) of the 20 countries sharing the single currency fell by 0.1% from July to September quarter-on-quarter, according to the first estimate from Eurostat published this Tuesday. Now, analysts believe a technical recession is possible in the second half of the year, which will happen if GDP declines once more in the fourth quarter.
Inflationary tensions and monetary policy have their role to play in this gloomy economic outlook. To fight inflation, the ECB has raised its rates ten times since July 2022, with the aim of tightening access to credit, in order to weigh on demand and thus stem the crazy surge in prices. The policy nevertheless seems to be bearing fruit: following having clearly run out of steam in recent months, the euro zone’s annual inflation rate fell spectacularly to 2.9% year-on-year in October, following having stood at 5. 2% in August and 4.3% in September, Eurostat announced on Tuesday.
The institution also warned that the risks of a resumption of inflation, accentuated by the war in the Middle East, remained too high to consider the slightest reduction in rates in the immediate future. The European Central Bank must not “ close the door to a further rise » interest rates, even estimated Isabel Schnabel, member of the ECB executive board, in a speech given Thursday evening in Saint-Louis (United States).
(With AFP)
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