JOBLESS numbers across the eurozone hit a record 18 million in July, the grim new high announced as recession takes grip across the debt-stricken 17-nation currency area.
The 18,002,000 headline jobless figure released by Eurostat was the highest since records began in 1995, the European Union data agency confirmed.
An additional 88,000 people joined the ranks of the unemployed throughout July, although upwardly-revised June data meant that the unemployment rate was unchanged at 11.3 per cent, it said.
With an estimated 25.254 million unemployed across the full European Union, which also includes non-euro heavyweights Britain and Poland, and annualised inflation also rising to 2.6 per cent in August according to a separate Eurostat release, the figures had analysts warning of ever-tighter household spending acting as a further drag on governments’ hopes of recovery.
The stark jump in dole queues added to fuel-price rises at the root of the renewed climb for inflation “supports the view that the downturn in household spending will intensify in the second half of this year”, said London-based Capital Economics’ Ben May.
The news emerged as the International Labour Organisation warned of a “catastrophic” rise in unemployment, especially among the young, if debt-racked Greece were to leave the eurozone or if the bloc were to split.
“It would be a catastrophe for the European youth,” Ekkehard Ernst, a senior economist at the UN body, told a German daily, warning that close to one in 10 would be without a job even in powerhouse Germany by 2014.
At 5.5 per cent, the unemployment rate was much lower in Europe’s leading economy, likewise neighbouring Austria and The Netherlands, but more than one in four are still out of work in Spain.
According to Christian Schulz of Berenberg bank, German jobs growth over recent months was already “past its peak”.
Annual unemployment increases in Spain and Greece were easily the highest, and both countries, labouring under sovereign and banking debt crises, logged jobless rates among the key under-25s age-group of more than 50 per cent.
In a note released ahead of the data’s publication, analyst Patrick Arbus of France’s Natixis warned that rising unemployment coupled with austerity was leading directly to “destruction of growth potential.”
The EU announced earlier in August that eurozone growth slipped back into reverse over the second quarter of 2012, with a 0.2-per cent contraction.
Subsequent commercial surveys of private business activity also showed a seventh monthly decline in a row in August marked by the rate of contraction gathering pace in Germany.
According to research firm Markit, the eurozone is facing a 0.5-0.6 per cent drop in gross domestic product (GDP) for the third quarter, which would meet the widely accepted definition of recession, two successive quarters of economic contraction.