Eurozone unemployment rises to new record: 11.6%

[Bad_Daddy 2,209]

http://news.yahoo.com/eurozone-unemployment-rises-record-100226649--finance.html

By PAN PYLAS | Associated Press – 2 hrs 5 mins ago

LONDON (AP) — Unemployment in the 17-country eurozone hit a record high of 11.6 percent in September, official figures showed Wednesday, a sign the economy is deteriorating as governments struggle to get a grip on their three-year debt crisis.

The rate reported by Eurostat, the EU's statistics office, was up from an upwardly-revised 11.5 percent in August. In total, 18.49 million people were out of work in the eurozone in September, up 146,000 on the previous month, the biggest increase in three months.

While the eurozone's unemployment rate has been rising steadily for the past year as the economy struggled with a financial crisis and government spending cuts, the United States has seen its equivalent rate fall to 7.8 percent. The latest U.S. figures are due this Friday.

With the eurozone economy fading, most economists think unemployment will keep increasing over the coming months and that the deteriorating economic picture will soon spook investors again after a brief hiatus.

"Financial markets have calmed somewhat, but we expect that the deteriorating economy will soon enough lead to more crisis headlines," said Tim Ohlenburg, senior economist at the Centre for Economics and Business Research

Five countries in the eurozone are already in recession — Greece, Spain, Italy, Portugal, and Cyprus — and others are expected to join them soon.

The region as a whole is expected to be confirmed to be in recession when the first estimate of eurozone economic activity in the third quarter is published mid-November — a recession is officially confirmed after two consecutive quarters of negative growth.

"With surveys suggesting that firms are becoming more reluctant to hire, the eurozone unemployment rate looks set to rise further, placing more pressure on struggling households," said Ben May, European economist at Capital Economics.

Recession and unemployment make it more difficult for the eurozone to deal with its debt problem — governments need to pay more benefits to the jobless and receive fewer tax revenues. That could push countries to take even more austerity measures, which in turn weighs on economic activity.

Once again, Spain held the ignominious position of having the highest unemployment rate in the eurozone, at 25.8 percent. Greece may yet surpass that — its unemployment rate mushroomed to 25.1 percent in July, the latest available figure, and is due to increase in the face of what many economists are calling an economic depression. The country is forecast to enter its sixth year of recession next year.

Both countries, which are at the heart of Europe's three-year debt crisis, have youth unemployment above 50 percent. That risks creating a lost generation of workers and is straining the countries' social fabric. Extremist political groups in Greece and regional separatist parties in Spain have grown in popularity as the economy worsened.

Concern over the social impact of unemployment has also weakened governments and hobbled political decision-making.

In Greece, the three parties in the coalition government have tried for months to agree on an austerity package that is necessary for the release of bailout loans to prevent the country's bankruptcy.

The lowest unemployment rate in the eurozone was Austria's 4.4 percent. Germany, Europe's biggest economy, has a jobless rate of only 5.4 percent.

Separately, Eurostat reported that inflation in the eurozone fell modestly to 2.5 percent in the year to October, from the previous month's 2.6 percent. Inflation is still above the European Central Bank's target of keeping price rises just below 2 percent.

"High and rising unemployment, and relatively sticky inflation, does not bode well for consumer spending across the eurozone, especially as consumers in many countries are also facing muted wage growth and tighter fiscal policy," said Howard Archer, chief European economist at IHS Global Insight.

Above-target inflation has not prevented the ECB cutting its key interest rate to a record low of 0.75 percent, but few economists think financially-strained consumers will get any more help from the bank at next week's monthly policy meeting.

[Mr. Big Dog 10,747]

It's the result of austerity. The stricter the austerity measures, the higher the unemployment rates across Europe.

[Bad_Daddy 2,209]

It's the result of austerity. The stricter the austerity measures, the higher the unemployment rates across Europe.

And why did they have to implement austerity measures?

[Mr. Big Dog 10,747]

And why did they have to implement austerity measures?

They didn't have to do that. And they are coming to realize that austerity is not getting them where they need to go. Which is why pro-growth policies are beginning to gain popularity in Europe. Not a single country that has banked on austerity has achieved any of it's economic or fiscal goals. In fact, the fiscal picture in all of these countries is worse today than it was before the austerity measures were adopted.

[JohnR! 5,495]

They didn't have to do that. And they are coming to realize that austerity is not getting them where they need to go. Which is why pro-growth policies are beginning to gain popularity in Europe. Not a single country that has banked on austerity has achieved any of it's economic or fiscal goals. In fact, the fiscal picture in all of these countries is worse today than it was before the austerity measures were adopted.

Apparently we are doing something right, since we are going in the opposite direction...

While the eurozone's unemployment rate has been rising steadily for the past year as the economy struggled with a financial crisis and government spending cuts, the United States has seen its equivalent rate fall to 7.8 percent.

[OnMyWayID 1,489]

They didn't have to do that. And they are coming to realize that austerity is not getting them where they need to go. Which is why pro-growth policies are beginning to gain popularity in Europe. Not a single country that has banked on austerity has achieved any of it's economic or fiscal goals. In fact, the fiscal picture in all of these countries is worse today than it was before the austerity measures were adopted.

They were living off of credit cards.. I can go charge an extra 10,000 a month and temporarily improve my standard of living as well. Eventually I have to pay that back and I will have to lower my standard of living. What they were doing before is unsustainable because eventually the creditors will not let you charge on the card anymore..

The option of just borrowing more money is going away so what they were doing before is no longer possible.. They have several options open to them: Cut back and pay back the money they owe, devalue the currency, default on the money they owe.

All of the options have pros and cons, all of them mean a lower standard of living for a generation.

This country of course is in the same boat.

[Póg mo 1,749]

And why did they have to implement austerity measures?

Because idiots spent decades undermining the tax base, and making it so that governments were increasingly dependent on ever rising levels of consumer spending.

[OnMyWayID 1,489]

Apparently we are doing something right, since we are going in the opposite direction...

While the eurozone's unemployment rate has been rising steadily for the past year as the economy struggled with a financial crisis and government spending cuts, the United States has seen its equivalent rate fall to 7.8 percent.

Currently we are staving off larger problems by in-effect printing more money. We are getting away with it because we were in danger of deflation after 2008 so pumping money into the system did not cause inflation and higher interest rates. We will not be able to keep this up forever as it will devalue the currency - unless that is the path we choose to get out of the debt problem.

[Bad_Daddy 2,209]

They didn't have to do that. And they are coming to realize that austerity is not getting them where they need to go. Which is why pro-growth policies are beginning to gain popularity in Europe. Not a single country that has banked on austerity has achieved any of it's economic or fiscal goals. In fact, the fiscal picture in all of these countries is worse today than it was before the austerity measures were adopted.

Funny how the Germans begged the Greeks and the Spanish to start implementing austerity measures. Of course the Greeks and Spaniards could have told the Germans to go shove off, kept spending money like there was no tomorrow and watch the Germans eat the tab. So ya, we know why Europe implemented those austerity measures. You can't spend what you don't have unless you expect the German banks to pick up your tab.

btw it looks like Merkel took a page from the Republicans hand book.

http://www.reuters.com/article/2012/10/11/us-germany-merkel-idUSBRE89A0QL20121011

Merkel says planned tax cuts to revive European economy

Apparently we are doing something right, since we are going in the opposite direction...

While the eurozone's unemployment rate has been rising steadily for the past year as the economy struggled with a financial crisis and government spending cuts, the United States has seen its equivalent rate fall to 7.8 percent.

It's been posted on here with links ad nauseum as to why those numbers have dropped. When peoples unemployment benefits run out they don't show up on the books any more giving those skewed numbers. Try something else.

Edited October 31, 2012 by Bad_Daddy

[JohnR! 5,495]

Currently we are staving off larger problems by in-effect printing more money. We are getting away with it because we were in danger of deflation after 2008 so pumping money into the system did not cause inflation and higher interest rates. We will not be able to keep this up forever as it will devalue the currency - unless that is the path we choose to get out of the debt problem.

And that is what the Fed is supposed to do, which is very much in line with the duties of the Bundesbank....

[Bad_Daddy 2,209]

And that is what the Fed is supposed to do, which is very much in line with the duties of the Bundesbank....

You didn't explain what the Fed is suppose to do. Do you mean they are suppose to print more money thus devaluing the dollar? Is that what you meant with that post?

[JohnR! 5,495]

You didn't explain what the Fed is suppose to do.

Google is your friend.

[Bad_Daddy 2,209]

Google is your friend.

In other words you can't explain your post.

Edited October 31, 2012 by Bad_Daddy

[OnMyWayID 1,489]

And that is what the Fed is supposed to do, which is very much in line with the duties of the Bundesbank....

You are correct.. I was not dissing them at all.. But they can only do so much and a growing debt eventually will make their job impossible.. At some point they will have to choose between high interest rates (inflation) and jobs, knowing that every-time they tick up the interest rate to cool inflation that more people will lose their jobs.. If republicans are in control unemployment will be high, if Democrats are in charge inflation will be high.. .As the debt moves even higher we will have both high unemployment and inflation and the fed will be out of options.

"Mr. Big Dog" is correct in that we could grow our way out of the problem by simply not spending more as the economy grows. This was a very valid option for many years but now we are having to borrow large sums of money just to make the economy grow - you can't pay down credit cards by charging them to other credit cards.. We could decide to just pay the interest on the debt and not create new debt fora decade or so. That still would require us not to make new debt.

Edited October 31, 2012 by OnMyWayID

[JohnR! 5,495]

In other words you can't explain your post.

I don't have to.

www.gyif.com