Eurozone unemployment hits record 10.9% as manufacturing slumps to recession!

Eurozone unemployment hit a record in March, with Spain's 24.1% rate setting the pace.

NEW YORK (CNNMoney) -- Unemployment in the eurozone rose to 10.9% in March, another sign of the broad economic weakness and possible recession across the continent.

The unemployment rate across the broader 27-nation European Union remained at 10.2% in March, according to a organization report Wednesday.

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But the 17-nation eurozone unemployment edged up from 10.8% in February. The EU and eurozone rates are the highest since the creation of the common euro currency in 1999.

There are now 13 nations in Europe struggling with double-digit percentage unemployment, led by a 24.1% rate in Spain, which was a record high, and 21.7% in Greece.

The rising jobless rates are primarily blamed on the ongoing European sovereign debt crisis, which has forced governments to take tough austerity measures to cut spending.

Europe's next recession risk: Germany

There are 12 countries in Europe that have had two or more consecutive quarters in which their gross domestic product has dropped -- a condition many economists say define a recession. Nine of the countries are in the eurozone, and three use their own currency.

The United Kingdom, which had an 8.2% unemployment rate in its most recent reading, is the largest economy now in recession.

The entire EU and and eurozone are widely believed to be in recession as well, a fact likely to be confirmed when their combined GDPs are reported on May 15.

Even some of the healthier countries in Europe are likely to meet that criteria, including Germany, the EU's largest economy and one in which unemployment is 5.6%, the fourth-lowest rate on the continent.

German GDP declined 0.2% in the fourth quarter and many economists are forecasting another drop in the first quarter, suggesting Germany could be in recession soon.



By contrast to Europe, the U.S. unemployment rate has been steadily falling, reaching 8.2% in March. The jobless rate here reached a 26-year high of 10.0% in October 2009, but it has declined in six of the last seven months, shaving almost a full percentage point off the 9.1% rate of last August.

Economists surveyed by CNNMoney forecast that the rate will stay unchanged in the April jobs report this Friday, while hiring is expected to pick up to a gain of 160,000 jobs

By Chris Isidore @CNNMoney, Newscribe : get free news in real time

Eurozone manufacturing heads towards recession

 

(BRUSSELS) - Gloom over eurozone manufacturing deepened in April, highlighting the impact of policies to control budgets and signalling recessionary pressures, a Markit survey showed on Wednesday.

A key index of activity based on a survey by Markit fell to almost the lowest level for three years.

Markit publishes closely watched leading indicators of economic activity and in its latest survey for its purchasing managers' index the firm said: "The eurozone manufacturing downturn took a further turn for the worse in April."

The adjusted manufacturing PMI figure, closely watched as an indicator of economic trends, fell to 45.9 from 47.7 in March.

A figure of below 50 points to contraction and Markit noted that "the headline PMI has signalled contraction in each of the past nine months."

The chief economist at Markit, Chris Williamson, said: "Manufacturing in the eurozone took a further lurch into a new recession in April, with the PMI suggesting that output fell at (a) worryingly steep quarterly rate of over 2.0 percent."

He said that "austerity in deficit-fighting countries is having an increasing impact on demand across the region" and that "even German manufacturing output showed a renewed decline."

Williamson commented that the latest forecast from the European Central Bank "of merely a slight contraction of GDP (gross domestic product) this year is therefore already looking optimistic."

He added: "However, with the survey also showing inflationary pressures to have waned, the door may be opening for further stimulus."

His remarks highlight controversy over policies in many countries to correct budget deficits and heavy debt to install confidence on debt markets where governments borrow.

There are increasing warnings that the eurozone must raise economic growth, but opinions differ on the best route, with some saying that budget austerity opens the way to structural reform and competitiveness and others saying that extra stimulus is essential.

Markit said that "the April PMIs also indicated that manufacturing weakness was no longer confined to the region's geographic periphery."

In Germany, which has the biggest economy in the eurozone and has shown broad resilience to downturn elsewhere, Markit also noted a setback.

"The German PMI fell to a 33-month low, conditions deteriorated sharply again in France and the Netherlands also contracted at a faster rate," it said.

Markit said: "There was no respite for the non-core nations either, with steep and accelerating downturns seen in Italy, Spain and Greece. Only the PMIs for Austria and Ireland held above the 50.0 no-change mark."

Markit said that manufacturers reported weak demand from clients inside and outside the zone and this had hit even German companies.

The worsening outlook for eurozone manufacturing was also affecting the job market, Markit said, just as eurozone data put the unemployment rate at a record high level.

In manufacturing "job losses were reported for the third straight month in April, with the rate of decline the sharpest in over two years," Markit said on the basis of its survey. - AFP.

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Europeans migrate south as continent deepens into crisis

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Helen Pidd in Berlin guardian.co.uk

Tens of thousands of Irish, Greek and Portuguese people leave in search of a new life as the eurozone's woes worsen

Gaelic sportsman Mick Hallows of the Roundtowers club in Clondalkin, Dublin who has emigrated to Australia because of a lack of work in Ireland. Photograph: Kim Haughton

Since its conception, the European Union has been a haven for those seeking refuge from war, persecution and poverty in other parts of the world. But as the EU faces what Angela Merkel has called its toughest hour since the second world war, the tables appear to be turning. A new stream of migrants is leaving the continent. It threatens to become a torrent if the debt crisis continues to worsen.

Tens of thousands of Portuguese, Greek and Irish people have left their homelands this year, many heading for the southern hemisphere. Anecdotal evidence points to the same happening in Spain and Italy.

The Guardian has spoken to dozens of Europeans who have left, or are planning to leave. Their stories highlight surprising new migration routes – from Lisbon to Luanda, Dublin to Perth, Barcelona to Buenos Aires – as well as more traditional migration patterns.

This year, 2,500 Greek citizens have moved to Australia and another 40,000 have "expressed interest" in moving south. Ireland's central statistics office has projected that 50,000 people will have left the republic by the end of the year, many for Australia and the US.



Portugal's foreign ministry reports that at least 10,000 people have left for oil-rich Angola. On 31 October, there were 97,616 Portuguese people registered in the consulates in Luanda and Benguela, almost double the number in 2005.

The Portuguese are also heading to other former colonies, such as Mozambique and Brazil. According to Brazilian government figures, the number of foreigners legally living in Brazil rose to 1.47 million in June, up more than 50% from 961,877 last December. Not all are Europeans, but the number of Portuguese alone has jumped from 276,000 in 2010 to nearly 330,000.

Gonçalo Pires, a graphic designer who has swapped Lisbon for Rio de Janeiro, said: "It's a pretty depressing environment there [in Portugal]." In Brazil, by contrast, "there are lots of opportunities to find work, to find clients and projects".

Joy Drosis, who left her Greek homeland for a life in Australia, expressed similar motives.  "I had to do something. If I had stayed in Greece, we were all doomed," she said. "I'm lucky that I can speak the language: many others can't."

The key moment in this southerly migration may have come last month, when the Portuguese prime minister, Pedro Passos Coelho, made a humbling visit to Angola, begging for inbound investment. Just 36 years after the end of Portuguese colonial rule in Angola, its president was ready to show mercy.

"We're aware of the difficulties the Portuguese people have faced recently," said José Eduardo dos Santos. "Angola is open and available to help Portugal face this crisis."

But the Portuguese making this move will not have it easy: life expectancy in Angola is still just 39, compared with 79 in Portugal, and crime is rife.

In Ireland, where 14.5% of the population are jobless, emigration has climbed steadily since 2008, when Lehman Brothers collapsed and the bottom fell out of the Irish housing market. In the 12 months to April this year, 40,200 Irish passport-holders left, up from 27,700 the previous year, according to the central statistics office. Irish nationals were by far the largest constituent group among emigrants, at almost 53%.

The Guardian spoke to one Dublin under-19s football and hurling club that had lost eight out of 15 players in the past 18 months. Most of the nascent sports stars had headed to Australia. Experts believe the exodus will increase, given the £1.4bn tax rises and austerity measures just announced. The thinktank the Economic and Social Research Institute (ESRI) forecast this month that 75,000 people would emigrate from Ireland in 2012 .

For departing Greeks the top destinations over the years, according to the World Bank, have been Germany, Australia, Canada, Albania, Turkey, UK, Cyprus, Israel and Belgium.

Skilled Greeks are particularly likely to leave: as an example of what can happen, 4,886 physicians emigrated in the year 2000 (the last year for which the World Bank's Migration and Remittances Factbook cites data for departing doctors), meaning the country lost 9.4% of its doctors in that single year.

The World Bank gives the number of immigrants living in Greece as about 1.13 million in 2010, around 10% of the population. Most have come, over the years, from poorer countries such as Albania, Bulgaria, Romania and Georgia, it is likely that the majority of new arrivals lack the skills to replace the emigrants.

Additional reporting by Henry McDonald in Dublin, Helena Smith in Athens, Tom Phillips in São Paulo, and Alison Rourke in Sydney 

• This article was amended on 22 December 2011 to delete a sentence reading: "In 2010, 1.21 million people emigrated [from Greece], according to the World Bank, equalling 10.8% of the population." This was actually the total "stock" of Greeks said by the World Bank to be living overseas as of 2010, not the number who emigrated in that year. Also deleted was a reference stating that "1.3 million people arrived [in Greece] in 2011". This was the total "stock" of immigrants said by the World Bank to be living in Greece as of 2010, not the number who arrived in that year. A sentence saying that 4,886 physicians emigrated from Greece in 2010 has been corrected; the year was 2000.