Employment woes for Europe continue

The euro-area unemployment rate remained unchanged in May as the currency bloc struggled to shake off the legacy of the debt crisis. The jobless rate stayed at 11.6 percent after the April number was revised down from 11.7 percent, the European Union’s statistics office in Luxembourg said today it highlights the euro-zone’s economic recovery is still too weak to erode the significant amount of slack in the labor market. This will be further compounded by Siemens, Europe’s largest engineering company, who will eliminate at least 11,600 positions as it cuts about 1 billion euros ($1.4 billion) in costs.

The European Central Bank last month unveiled a package of measures including a negative deposit rate and conditional long-term loans to banks to stoke lending and drive growth. ECB President Mario Draghi said in April that his “biggest fear” is a stagnation that leads to high unemployment becoming structural. Manufacturing in the euro area slowed more than initially estimated in June, London-based Markit Economics said today. It grew at the fastest pace since 2007 in Spain, while contracting for a second month in France. The average unemployment rate is seen at 11.7 percent for 2014, dipping to 11.3 percent in 2016, another survey shows. Joblessness continued to vary widely across the euro area in May, from a low of 4.7 percent in Austria to 25.1 percent in Spain. Greece reported a rate of 26.8 percent for March. The unemployment rate for people under 25 in the euro zone decreased to 23.3 percent from 23.4 percent.