Unemployment up again in eurozone

The unemployment rate across the 16 countries using the euro rose to 9.5% in May from 9.3% in April, data from the Eurostat agency has shown.

It is the highest rate since May 1999. Fifteen million people were out of work, up by 273,000 from April.

In the 27-nation EU, the jobless rate was 8.9%, while the number unemployed rose by 385,000 to 21.5 million.

Spain had the highest unemployment rate at 18.7%, while the Netherlands had the lowest rate of 3.2%.

‘Likely to continue’

“May’s sharp increase in eurozone unemployment demonstrates that the ‘green shoots of recovery’ are not yet showing up in the labour market,” said Martin van Vliet, an economist at ING.

“It would have been higher still if not for the short-time working schemes in some eurozone countries such as Germany and the Netherlands, where recent increases in unemployment have been less severe.”

Short-time working is a system that allows companies to work less for up to six months while their loss of earnings is made up by the government.

“We think that unemployment is likely to continue to rise certainly through this year and actually through most of next year as well,” said Nick Kounis, an economist at Fortis.

“We see the unemployment rate peaking at around 11.5%… at the end of next year.” –BBC News