Europe’s Jobless Rate Unexpectedly Hits 11-Year High

Simone Meier
Bloomberg
Friday, January 8th, 2010

Europe’s unemployment rate unexpectedly increased to 10 percent, the highest in more than 11 years, as companies cut costs in the wake of the worst recession in more than six decades.

November’s euro area jobless rate rose from a revised 9.9 percent in October, the European Union statistics office in Luxembourg said today. That’s the highest since August 1998. Economists forecast a November rate of 9.9 percent after the 9.8 percent initially reported for October, a Bloomberg survey showed. The euro-area economy expanded 0.4 percent in the third quarter from the previous three months, according to a separate report.

European companies are cutting jobs and paring wages to shore up earnings battered by the global slump. While economic confidence has risen to a level last seen before the 2008 demise of Lehman Brothers Holdings Inc., a surge in energy costs and a stronger euro threaten to damp the recovery.

“We’ll probably see further gains in unemployment over the coming months, with the jobless rate peaking at 10.7 percent in the second half,” said Juergen Michels, chief euro-region economist at Citigroup Inc. in London. “That’s obviously bad news to consumers, which will be hurt by job cuts, lower wage growth and rising energy costs.”

Full article here

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