Eurozone jobless rate stable at 9.8 percent

AP News
Posted: Dec 01, 2009 6:36 AM

The unemployment rate in the 16 countries that use the euro held steady at an 11-year high of 9.8 percent in October, official figures showed Tuesday, stoking hopes that the recovery from recession may be feeding through to the labor market sooner than anticipated.

Eurostat, the EU's statistics office, said the unemployment rate in the eurozone was unchanged from the previous month, even though a net 134,000 individuals lost their jobs during the month, taking the total up to 15.6 million.

The figures have fueled optimism that the peak in unemployment in the eurozone may not be as high as feared and may fall short of the 10 percent already recorded in the U.S.

"There is hope that the labor market downturn is coming towards an end, suggesting that consumers might soon start to spend again but a strong recovery seems unlikely," said Jennifer McKeown, European economist at Capital Economics.

Rising consumer spending will be key to whether the recovery in the eurozone gathers pace. The return to growth in the third quarter was mainly due to a rebound in exports from Germany, the eurozone's biggest economy, and a build-up in company stock levels.

Among euro members, Eurostat said the lowest unemployment rate in the eurozone was the 3.7 percent recorded in the Netherlands while the highest was Spain's massive 19.3 percent. Germany had an unemployment rate of 7.5 percent, down 0.1 percentage point on the previous month.

Germany's decline was offset by increases in France, Italy and Spain.

For the 27-nation EU as a whole, which includes non-euro members such as Britain and Sweden, the unemployment rate rose by 0.1 percentage point to 9.3 percent in October after another 258,000 joined the ranks of the unemployed. The highest unemployment rate in the EU was Latvia's 20.9 percent.

The scale of the damage wrought by the recession is evident in the annual comparisons _ since October last year, unemployment in the EU has surged by a massive 5 million and by 3.15 million in the eurozone.