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Eurozone unemployment sees only mild rise in May

By Abigail Townsend

Date: Thursday 02 Jul 2020

Eurozone unemployment sees only mild rise in May

(Sharecast News) - Unemployment nudged higher across the Eurozone in May, official data showed on Thursday, although the increase was smaller than predicted.
Eurostat, the European Union's statistics office, said that seasonally-adjusted unemployment rose by 0.1 percentage point in May, to 7.4%. Most analysts had pencilled in 7.7%. Across the wider EU, the unemployment rate was 6.7%, compared to 6.6% in April.

Eurostat estimated that 14.366m men and woman were unemployed in May, 12.146m of which were based in the Eurozone.

Within individual countries, the seasonally adjusted unemployment rate in Germany - the bloc's biggest economy - was 5.0%, compared to 4.9% in April. In Italy, it was 7.8%, up from 6.6%, but in France it was 8.1%, down on the previous month's figure of 8.7%.

Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics, said: "The headline jobless data currently are distorted beyond recognition by two issues. First, workers furloughed by governments' job-retention schemes count as employed, and we don't know how many of them will face outright unemployment until these measures are phased out entirely. That will take some time.

"Secondly, and more seriously in the near term, many workers have been kicked out of the statistics because the lockdowns mean they're unable to search for work, let alone accept one if they get an offer."

Pantheon Macroeconomics is forecasting that the true underlying unemployment rate in the Eurozone will jump to between 10% and 15% over the next six months.

Bert Colijn, senior economist, Eurozone, at ING, wrote in a blog: "Compared to the US, the Eurozone labour market looks very strong at the moment."

But he added: "In the months ahead, the surprisingly stable Eurozone unemployment rate is likely to continue to creep up. This is simply because the economy is unlikely to reach the level of pre-crisis output anytime soon, leading to the inevitable job losses, especially when short-term work schemes draw to a close."

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