Eurozone joblessness hits record but inflation eases

Joblessness in the eurozone reached a new record in October, with another 173,000 people out of work, but consumer prices dropped sharply in November and offered some relief to households during the recession.

Annual inflation in the eurozone was 2.2 percent in November, the EU’s statistics office Eurostat said on Friday, dropping from 2.5 percent in October and below the 2.4 percent level forecast by economists in a Reuters poll.

Months of stubborn inflation combined with record unemployment have made life even harder for indebted families struggling through three years of a public debt crisis that has forced governments and companies to drastically cut jobs.

One of the smallest rises in energy price inflation in a year helped bring consumer inflation to near the European Central Bank’s target of near, but just under 2 percent, according to Eurostat’s first estimate.

But the eurozone economy, which this year sank into its second recession since 2009, may manage only a weak recovery next year and unemployment levels will continue to rise, economists and policymakers say.

“We have not yet emerged from the crisis,» European Central Bank President Mario Draghi said on Friday. «The recovery for most of the eurozone will certainly begin in the second half of 2013,» he told France’s Europe 1 radio.

Unemployment rose to 11.7 percent in October, Eurostat said, up from 11.6 percent in September and a marked increase from the 9.9-percent level a year ago, leaving almost 19 million people out of a job.

Portugal, for instance, shed more than one in twenty public sector jobs in the first nine months of 2012, while industries ranging from carmakers to financial groups have announced thousands of job cuts since September.

Still, the overall number masks wide divergences across the 17-nation bloc, with Austrian unemployment running at 4.3 percent of the working population and Spain’s joblessness levels at 26.2 percent, the highest in Europe.


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