Eurozone unemployment hits record, inflation falls

Official data Friday painted a far from encouraging picture for the European economy, with unemployment running at record highs in the eurozone while inflation fell sharply, highlighting the weakness of consumer demand. Separately, a closely followed manufacturing survey suggested the eurozone remained firmly in the doldrums for a 19th consecutive month in February although it also noted some signs of increased export demand -- a key growth driver. The Eurostat data agency said unemployment in the 17-nation eurozone rose to a record 11.9 percent in January from 11.8 percent in December, with nearly 19 million people out of work. In the 27-member EU, the unemployment rate edged up to 10.8 percent from 10.7 percent in December, with 26.2 million jobless. Eurostat said that compared with December, some 201,000 joined the jobless queues in the eurozone in January and 222,000 in the EU. The highest jobless rates were in bailed-out Greece, at 27 percent -- although this figure is for November -- and in struggling Spain, on 26.2 percent. The lowest rates were Austria with 4.9 percent, and Germany and Luxembourg, both on 5.3 percent. A year earlier in January 2012, eurozone unemployment was 10.8 percent and the EU 10.1 percent, highlighting how the debt crisis and economic slump have hit the jobless number, especially among the under-25s. Eurozone youth unemployment was put at 24.2 percent in January, up from 21.9 percent in January 2012. In the EU, under-25 unemployment rose to 23.6 percent from 22.4 percent. For Greece, the youth unemployment rate in January was given as 59.4 percent, with Spain on 55.5 percent and Italy 38.7 percent. On the eurozone inflation front, Eurostat said the rate of price increases fell to 1.8 percent in February, putting it well below the European Central Bank's target rate for the first time in more than two years. In January, the inflation rate was 2.0 percent. The last time inflation was below this level was in November 2012 when it hit 1.9 percent. The ECB, whose first responsibility is price stability, has a long-term inflation target of close to but below 2.0 percent. Low inflation would normally be seen as a positive, meaning price pressures are contained, but it also reflects the state of consumer demand which inevitably suffers at times of high unemployment when people worry about job security and prefer to save money rather than spend it.