Official data compiled by Eurostat has shown that the seasonally adjusted unemployment rate in the Eurozone hit a new record high of 12.2 per cent in April, up 0.1 per cent from the previous month.
19.38 million people across the 17 nation currency bloc are now unemployed after 95,000 more individuals were added to the ranks of the jobless last month.
The number of Eurozone citizens out of work has now increased every month for the past two years, and in the last financial year alone roughly 1.6 million people lost their jobs.
A separate report showed Italian unemployment rose to 12 per cent in April, rather than the 11.6 per cent expected by economists. The figure for March was also revised.
Quarter-on-quarter, Italian unemployment rose by 0.5 per cent.
Youth unemployment is a particular problem in Italy, with an unemployment level of 40.5 per cent among that particular demographic, prompting Italian President Giorgio Napolitano to comment: ‘We have to deal with the social crisis, which is expressed particularly in spreading youth unemployment, and place it at the centre of political action.’
This data, in conjunction with less-than-impressive German retail sales figures, prompted Euro declines.
Although economists were anticipating a modest 0.2 per cent gain in German retail sales they actually declined by 0.4 per cent.
The Euro slipped against several of its most traded peers on the strength of these results, but losses were limited by the news that Eurozone inflation accelerated in May, rising to 1.4 per cent in May from 1.2 per cent in April. The figure is gradually creeping closer the European Central Bank’s target of 2 per cent.
The big news to watch out for next week is the ECB’s rate decision. Although the central bank intimated that a negative deposit rate would be considered if the currency bloc’s economic recovery failed to gather momentum, the majority of economists aren’t expecting an additional rate cut to occur at the upcoming gathering.
One economist with HSBC asserted: ‘As long as the ECB’s baseline scenario of some recovery in the second half of the year remains in place I would be very surprised if they cut rates again over the next couple of months. They need to see a further deterioration from where we are currently rather than the stabilization they expect to see around the middle of the year.’
Euro (EUR) Exchange Rates As of 11:20:
The Euro/US Dollar Exchange Rate is currently in the region of: 1.2977 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8538 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.3556 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6287 >