Eurozone jobless rate hits record 11.6%

Unemployment in the eurozone hit a record high in September with nearly 150,000 more jobs lost as the bloc's debt crisis further undermined an economy slumping into recession, official data showed on Wednesday. The 17-nation eurozone had a jobless rate of 11.6 percent in September, up from 11.5 percent in August, with the number of those out of work rising to 18.49 million from 18.34 million, the Eurostat data agency said. The increase over the past year is well over two million. The highest unemployment rate was recorded again in Spain, where 25.8 percent of adults were out of work, with Austria posting the lowest rate of 4.4 percent and benchmark Germany and the Netherlands each on 5.4 percent. Across the 27-state European Union single market of half a billion consumers, 25.75 million men and women were out of work. While separate statistics showed inflation easing slightly in October to 2.5 percent, Ben May of London-based Capital Economics said the combined data "does not bode well for consumer spending. "Unemployment also rose in parts of the core," May said, referring to the eurozone heartland centred on Germany. "With survey measures suggesting that firms are becoming more reluctant to hire, the eurozone unemployment rate looks set to rise further, placing more pressure on struggling households," he said. The eurozone is faring far worse than its main international economic rivals. Japan announced an unemployment rate of 4.2 percent in September, while the United States, which is to announce its latest data on Friday, came in at 7.8 percent for September. As European leaders prepare for a divisive summit on November 22-23 on the European Union budget, the head of the European Parliament, German Socialist Martin Schulz, said political leaders were failing to take responsibility for the social impact of austerity-driven policies. Indeed, looking ahead, "the eurozone faces a difficult fourth quarter and beyond after almost certainly suffering further gross domestic product (GDP) contraction in the third quarter," economic analyst Howard Archer of IHS Global Insight said. Expert observers said the case was growing for the European Central Bank (ECB) to implement a cut in interest rates before the year ends. "The deteriorating cyclical outlook for the euro area as whole as we head into the winter supports our out-of-consensus call for an ECB rate cut at the December meeting," said Elga Bartsch of Morgan Stanley. Among the key eurozone territories, data published nationally has raised fears of a deepening slump. Italy's unemployment rate rose to a record 10.8 percent in September, preliminary data published by the national statistics office (ISTAT) showed on Wednesday. And in Germany, while the total number of people registered as unemployed was down, in seasonally adjusted terms, the jobless total rose by 20,000 to 2.937 million. "The labour market has so far remained comparatively robust to the deterioration in the economy. But the negative effects are there," said agency chief Frank Weise. "As the year-end approaches, it will become more difficult for Germany to remain untouched by Europe's recession," he added. "Unemployment could rise further over the next few months, given that the labour market usually reacts to the economic cycle with a lag," Berenberg Bank economist Christian Schulz added.