Euro zone unemployment stuck at record high even as economy improves

Mario Proenca | Bloomberg | Getty

Unemployment in the euro zone remained unchanged in June from the previous month, at 12.1 percent, according to the latest data from statistics agency Eurostat, despite signs of an improvement in the economy.

Jonathan Loynes, chief European economist at Capital Economics said the data were a "little sobering after the recent run of stronger activity data."

Purchasing managers index data earlier this month showed some signs of green shoots for the euro zone economy, but with the unemployment rate stuck at a record, policymakers are likely to come under pressure to do more.

In the European Union (EU) as a whole, the unemployment rate was 10.9 percent in June, down from 11 percent in May.

Eurostat estimates that 26.4 million men and women in the EU, of whom 19.266 million were in the euro area, were unemployed in June 2013. The jobless rate rose in 17 member states and fell only in ten.

The lowest unemployment rates were in Austria, Germany and Luxembourg while the highest remained in Greece (26.9 percent) and Spain (at 26.3 percent).

Youth unemployment remained high with 5.51 million people under 25 unemployed in the EU, of whom 3.5 million were in the euro area.

"Admittedly, euro-zone unemployment fell by 24,000 in June, the first monthly drop since April 2011...But this reflected a downward revision to previous months' data and the unemployment rate is still at a record high," Loynes said.

"What's more, the huge divergences between countries are a powerful reminder of the still enormous economic imbalances inside the currency union," he added.

Howard Archer, chief U.K. and European economist at IHS Global Insight, said the figures would fuel hopes that the euro zone was recovering, but those could be premature.

"Even so, we doubt that June marks a decisive turnaround in euro zone labor markets and we suspect that unemployment will trend modestly higher over the coming month."

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