Euro Zone Joblessness Reaches 15-Year High

Unemployment rises to record high on factory cutbacks

Unemployment across the euro zone reached its highest level in 15 years on Wednesday, according to data that show factories were cutting staff at the fastest pace in over 2 years.

Reuters reported Wednesday that the Markit Eurozone Manufacturing Purchasing Managers' Index (PMI) showed factories in the euro zone shed workers in April at their most aggressive pace in more than two years after the 11th straight month of falling orders. In March unemployment in the euro zone rose to 10.9%, equal to its record high of 15 years ago and pushed higher by job losses in Italy and Spain.

Peripheral nations were not the only ones affected, according to the report. Germany’s PMI dropped to a 33-month low, while France showed marked deterioration and the Netherlands contracted more quickly than previously as well. New order inflows fell their fastest since December, with Austria the only country seeing an increase in production in April.

Domestic and export customers both ordered less, with even Germany feeling the sting of reduced orders as its production fell for the first time in 2012. Greece continued to decline, while Italy and Spain did so at a faster pace than previously.

Chris Williamson, chief economist at Markit, said of the findings that with output falling “at [a] worryingly steep quarterly rate of over 2%,” the accelerated job losses suggest “firms are not expecting the gloom to lift any time soon.”

Austerity was taking its toll on countries struggling against high levels of debt, he said in the report, and called the European Central Bank’s (ECB) prediction of “merely a slight contraction of GDP this year … already looking optimistic.” He added, “[I]t is hard to see where growth will come from in coming months, unless export demand picks up strongly from countries outside of the euro zone.”

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