Saturday, March 2, 2013

Unemployment Sweeps Mediterranean

Official figures Friday showed that unemployment in the country in January rose to 11.7 percent from the previous month's 11.3 percent. January's figure was the highest since the current way of measuring unemployment was introduced in 1992.
The unexpectedly large monthly spike was one of the key backdrops to the election results earlier this week that reignited concerns over Europe's dormant debt crisis. No party, or coalition of parties, emerged with enough votes to govern alone, triggering uncertainty in the markets about the future course of Italian economic policy.
The rise in the Italian rate, which comes as the country is stuck in an 18-month recession and after a wave of economic reforms and tight budgetary controls introduced to control the country's debt, was also the main reason why unemployment across the 17 European Union countries that use the euro rose to a record 11.9 percent during January from the previous month's 11.8 percent.
Even more dramatic is the rise in the level of youth unemployment for the eurozone to 24.2 percent, which raises the risk of removing a whole generation from the labor force.
Eurostat, the EU's statistics office, said nearly 19 million people were unemployed in the eurozone following an increase of around 200,000 in January.
The increase was not a particular surprise given that the eurozone economy as a whole is in recession and expected to continue to contract in the first half of 2013. In the final three months of 2012, the eurozone contracted by a quarterly rate of 0.6 percent, with eight countries in recession - officially defined as two straight quarters of negative growth.
... 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.
Meanwhile, on related news, the Financial Times reports:

The latest official figures show that unemployment in Egypt has risen to 13 per cent in the last quarter of 2012, up from 12.5 per cent in the third quarter.
This translates into a loss of 162,000 jobs across the economy.
In comparison, unemployment on the eve of the 2011 revolt, which toppled Hosni Mubarak as president, was 8.9 per cent according to the government statistics agency.
Out of a workforce of 27m, the agency says, there are now some 3.5m jobless people.
But the official figures tell only part of the story, experts argue.
Samir Radwan, a labour economist who served as Egypt’s first post-revolution finance minister, says the real unemployment rate is bound to be higher because official figures do not factor in the informal economy in which a third of the workforce is employed.
“I never took the unemployment figures very seriously,” says Mr Radwan. “We know there are questions of credibility over whether they are correctly calculated or not. We never see the raw data and it makes a huge difference, for instance, if you add new graduates as unemployed or not. Some years in the past, they omitted them.”
But no one is quibbling with the fact that unemployment is rising, a trend which is supported by anecdotal evidence and which, economists say, is a logical outcome of the economic slowdown since the revolution.
Growth in 2012 was 1.9 per cent whereas in the few years immediately preceding the uprising, it ranged between 4 to 7 per cent.
Ashraf al-Araby, the planning minister, said last week that the government was aiming for a growth rate of 3 per cent in the current fiscal year ending in June 2013.
But to soak up some 700,000 new entrants to the job market every year, without even significantly denting the backlog of the unemployed, the economy needs to grow by 7 per cent and above.
Mr Radwan describes as a “time-bomb” the high rate of joblessness among people under 30, which is 74 per cent according to government figures.

You would think that the right ideologue would be able to tap into this discontent.  

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