Summary Another record of unemployment rate has badly hit the economy of the 17 European Union countries.
LONDON — Another month, another record unemployment rate for the economy of the 17 European Union countries that use the euro.
Figures released Friday by Eurostat, the EU s statistics office, showed that the recession in the eurozone pushed unemployment in the currency bloc up to 11.7 percent in October, a new record since the introduction of the euro in 1999.
The rise from the previous record of 11.6 percent in September was anticipated after the eurozone returned to recession in the third quarter, commonly defined as two consecutive quarters of negative growth.
While the eurozone s unemployment has been inching upward since June 2011, the equivalent rate in the U.S. has fallen to below 8 percent as the world s largest economy continues its recovery from recession. In October, it stood at 7.9 percent.
Eurostat found 18.7 million people were out of work across the eurozone, an increase of 173,000 on the previous month and 2.2 million higher than the year before. The wider 27-nation EU that includes non-euro countries such as Britain and Poland had an unemployment rate of 10.7 percent and a total of 25.9 million out of work.
"The level of unemployment in Europe remains unacceptably high," said Jonathan Todd, a spokesman for the European Commission, the EU s executive arm.
Spain and Greece have the region s highest unemployment rates — both over 25 percent, with youth unemployment levels heading towards 60 percent, a figure that could have a long-term economic and political impact.
"Talk of a lost generation of young people now looks like an alarming possibility," said Andrea Broughton, principal research fellow at the Institute for Employment Studies.
Both countries are in recession and struggling to convince investors, as well as their own people, that they can control their economies. Both, along with a number of other euro countries, have introduced tough austerity measures, such as cutting spending and raising taxes, in order to get a handle on their debts.
However, reducing wages and pensions hits the labor force in the pocket and lowers demand in the economy.
Other measures taken alongside the austerity, such as reforming labor practices, boosting skills and education, are intended to promote jobs but they take time, both to enact and to feed through an economy.
"We expect, however, that progress in structural reforms, especially those that improve the functioning of labour markets, will help lower unemployment and facilitate new employment opportunities," Mario Draghi, the president of the European Central Bank, said in a speech Friday in Paris.
Many economists think that unemployment in many countries will carry on rising for months to come, certainly as long as the economies remain in recession. Draghi expects the recovery to start only in the second half of next year.
Marie Diron, a senior economic adviser at Ernst & Young, forecasts unemployment will rise through 2013 and peak a little under 20 million in the last quarter of the year. She said that by then, companies that have become "leaner and fitter" could fuel growth and start hiring again.
"But before we reach that stage, there is unfortunately more pain to go through with high social costs," Diron said.
The Commission s Todd said all EU countries should implement a new scheme — to be officially proposed next week — to help unemployed under 25 year olds. The scheme would ensure that, within four months of leaving school or becoming unemployed, a young person would be offered a job, further education, a traineeship or an apprenticeship.
"This would extend to the whole of the EU existing good practice that exists in, for example, Austria, Finland and Sweden," Todd said.
At present, the five euro countries at the forefront of the debt crisis — Greece, Spain, Italy, Cyprus and Portugal — are in recession.
Others, like the Netherlands and Austria — neither of which have milder debt problem — are also close to falling into recession, having posted declines in third-quarter economic output. Austria nevertheless has the lowest unemployment rate in the eurozone, at 4.3 percent.
The currency bloc s powerhouse economies, such as Germany and France, have also seen growth levels fall in the last year and that s increased pressure on businesses to cut costs. Industrial conglomerate Siemens AG, for example, announced Friday it would cut another 4,700 jobs, not all in Germany.
Germany s unemployment rate for last month was unchanged on Septembers 5.4 percent. However France s is nearly double that at 10.7 percent, also unchanged from the previous month.
Households got some good news in separate figures showing the annual inflation rate in the eurozone fell by more than anticipated to a 23-month low of 2.2 percent in November from 2.5 percent the previous month.
Since it was a preliminary estimate, Eurostat gave no reasons behind the decline but waning labor market pressures to lift wages are likely to have been, at least partially, behind the fall.
"We think inflation could fall quite a bit further over the next year or so in response to the spare capacity in the economy, helping to ease the squeeze on households real incomes," said Jonathan Loynes, chief European economist at Capital Economics. "But whether that will get them spending in an environment of austerity and rising unemployment is another matter."
Despite the November decline, inflation is still above the ECB s target of keeping price rises at just below 2 percent. Few economists think the ECB will cut its main interest rate from the current record low of 0.75 percent at its monthly policy meeting next Thursday.
