On the same day that figures were released confirming that job losses in the USA during June were larger than expected, comes news that during May unemployment in the Euro zone rose to 9.5%, its highest level in 10 years.
In April, the unemployment rate in the Euro zone -- which has 16 members and represents those countries for which the Euro is the official currency -- stood at 9.3%. The 0.2% increase since then represents a total of 273,000 people and brings the total out of work to 15 million.
Across the entire European Union, which has 27 members and includes a number of countries who have not yet adopted the Euro such as the UK, the jobless rate in May stood at 8.9%, an increase from April's figure of 8.7%. That 8.9% figure equates to 21.5 million people.
Whilst economists generally consider unemployment figures as a slightly unreliable indicator of the very latest economic conditions, they can be seen to rise for several months after a recession has officially been declared as over, the announcements today in Europe and the US will undoubtedly dampen some of the optimism that has been growing since global stock markets began to rally in March.
Perhaps one of the most striking features concerning today's figures from Europe is the vast difference between the jobless rate in the worst affected country and that in the country that is least affected. That difference is a full 15.5%, with 18.7% of the Spanish population unemployed but only 3.2% of the population in the Netherlands out of work. Some of the Baltic states are also suffering high levels of unemployment, with Latvia seeing a jump in its jobless rate from 15.3% in April to 16.3% in May.
Some caution has to be exercised when comparing the jobless figures between certain countries as there can be very different job markets and economic systems in place. For example a country such as the Netherlands operates what is known as a short-time working system, whereby the government will compensate any loss of earnings a company may suffer if that company introduces shorter working hours. And compensation of that nature can apply for a period up to 6 months in length.
Martin van Vliet, an economist working with the global financial services organization ING, made reference to the effects of such a system, as is operated in the Netherlands, in the short comment he made on the latest jobless figures that was reported by the
BBC:
May's sharp increase in eurozone unemployment demonstrates that the 'green shoots of recovery' are not yet showing up in the labour market. It would have been higher still if not for the short-time working schemes in some eurozone countries such as Germany and the Netherlands, where recent increases in unemployment have been less severe.
As always, opinions will vary greatly in the world of finance as to when a sustained global recovery can be expected. Some may say that it has already started. Whilst others, such as Nick Kounis of Fortis Bank, believe that a peak in unemployment is still a long way off. Mr Kounis is quoted by the
BBC as saying that the jobless rate will in fact continue rising until the end of 2010, by which time it will have reached 11.5%.
There are unquestionably as many different opinions on the matter as there are differing jobless rates in various parts of the world. But when you consider the number of experts who dismissed any notion that the world would suffer such a catastrophic economic meltdown as the one we have witnessed over the last 12-18 months, who is to say that we should believe anything that they tell us.
