This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Eurozone Jobless Hits Another Record

Last week, the European Commission, the EU's executive arm, forecast that that the eurozone unemployment rate was likely to rise further this year and average around 12.2 percent for the year as a whole.

Even if growth does emerge in the eurozone, as some recent economic indicators have suggested, it usually takes time for unemployment to start falling â¿¿ it is widely considered to be a lagging indicator. And high levels of unemployment make it even more difficult for economies to recover and for governments to get their public finances into shape.

Even though concern in the financial markets over the eurozone's problems of too much government debt has calmed recently, there appears to be a rising groundswell among people against austerity, which has been prescribed as the main cure. The inconclusive Italian elections were just the latest manifestation of that protest â¿¿ others include regular protests in Spain and Portugal, as well as the rise of right-wing extremists in Greece.

"High and still rising unemployment rates are probably the single most important threat to the mid to long-term economic stability of the eurozone," said Marie Diron, senior economic adviser at Ernst & Young. "As electorates fail to see the benefits of fiscal and economic reforms, we could see rising social tensions weakening governments and raising the possibility of a popular vote to exit the euro. In this context, it is essential to emphasize growth-enhancing reforms."

The overall unemployment rate masks huge divergences across the eurozone.

While Greece and Spain languish under the weight of mass unemployment of over 25 percent, many of the northern economies are operating with relatively low levels around the 5 percent mark. Germany's jobless rate stands at only 5.3 percent, while Austria's is only 4.9 percent even after a second straight monthly rise.

Though a marked change in austerity is unlikely to be welcomed in financial markets, let alone in Berlin or Brussels, those Europeans unable to find work may get some relief if a reported fall in inflation prompts the European Central Bank to cut interest rates again.

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 17,976.31 +263.65 1.49%
S&P 500 2,086.24 +25.22 1.22%
NASDAQ 4,947.4410 +56.2220 1.15%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs