Eurozone unemployment hits new record

The unemployment rate across the 17 European countries that use the euro has hit a record 12.2 percent in April, and the number of unemployed is on track to reach 20 million by year’s end.

The worsening jobs crisis points to the recession that has gripped the euro alliance. Many countries are struggling to stimulate growth, while grappling with a debt crisis that has led governments to slash spending and raise taxes.

Unemployment in the eurozone rose in April from the previous record of 12.1 percent set in March, Eurostat, the European Union’s statistics office, said on Friday. In 2008, before the worst of the financial crisis, the rate was far less – around 7.5 percent.

The number of unemployed rose 95,000 to 19.38 million. The currency bloc’s population is about 330 million.

The unemployment rate for the overall eurozone masks sharp disparities among individual countries. Unemployment in Greece and Spain top 25 percent. In Germany, the rate is a low 5.4 percent.

Youth unemployment

The differences are particularly stark for youth unemployment. More than half of people ages 16 to 25 in Greece and Spain are unemployed. In Italy, the rate for this group tops 40 percent. For Germany, it’s just 7.5 percent.

The disparities reflect the varying performances of the euro economies. Greece is in its sixth year of a savage recession. Germany’s economy has until recently been growing at a healthy pace.

A key factor behind Europe’s economic decline has been a broad focus on paring debt by raising taxes and slashing spending. As long as many governments continue to cut spending and the confidence of consumers and businesses remains low, economists don’t expect any meaningful recovery in coming months.

Friday’s data showed that the sharpest change in unemployment rates among the 17 euro countries was in Cyprus. Its unemployment rate jumped to 15.6 percent from 14.5 percent.

The European Central Bank has sought to ease the pressure on Europe’s businesses and consumers by cutting its main interest rate to a record low 0.5 percent this month. Another cut is possible. But most economists say it’s unlikely, even though the inflation rate remains under the ECB’s target of just below 2 percent.