Eurozone unemployment has jumped to its highest level in nearly ten years. The seasonally-adjusted jobless rate in the 16-country region rose from 8.9% in March to 9.2% in April, according to Eurostat, the European Union's statistical office.
The latest figure was the highest since September 1999. In April last year, the unemployment rate was 7.3% and the number of unemployed persons increased by 396,000 to 14.58 million in April from 14.18 million in March.
European policymakers will also be alarmed by the rise in youth unemployment. In April, about 18.5% of the labor force aged below 25 was without a job – up from 14.7 per cent a year before.
Details of the latest unemployment report show Spain continued to suffer the most, with an unemployment rate of 18.1% in April, up from 10% a year before. The Jobless rate for Germany rose to 7.7% from 7.6% and that for France jumped up to 8.9% from 8.8%.
“The eurozone recession may be past its peak, but for the labor market the worst is yet to come,” said Martin van Vliet at ING in Brussels.
The European Central Bank announced in May that it is planning to buy nearly EUR60 billion worth covered bonds to combat the recession.
Further details of the plan would be announced after the Governing Council meeting in June 4.
The ECB President Jean-Claude Trichet had said there are some tentative signs of stabilization, though at very low levels.
However, the labor market situation in the euro area is expected to remain bleak this year and the next. The European Commission said in its spring forecast that the jobless rate will probably rise to 9.9% this year and will reach 11.5% in the coming year.
The International Monetary Fund (IMF) also forecasts that the jobless rate for the region in 2009 will be at 10.1% and the 2010 rate at 11.5%.