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Eurozone unemployment rate hits 10 percent

29 January 2010, 13:22 CET
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(BRUSSELS) - One in 10 workers across Europe's core euro currency area is now unemployed, according to new European Union data issued on Friday that showed Spain bearing the brunt of a jobless recovery.

The human cost of structural economic adjustment post-recession could be seen when the seasonally-adjusted unemployment rate for the 16 euro countries hit a miserable 10 percent in December.

The EU's Eurostat agency estimated that an extra 87,000 people fell out of work in the weeks before Christmas -- down from the 102,000 people joining the benefit queues in November.

It was the highest rate since the currency was launched a decade ago and up from a downwards-revised 9.9 percent in November.

Initial figures for November published earlier this month had pegged the eurozone rate at 10 percent.

Across the 27-nation EU, the rate hit 9.6 percent in December, up from 9.5 percent and corresponding to 163,000 more people unemployed.

The statistics agency says more than 23 million people were out of work across the world's biggest open trading bloc, 15.763 million of whom were in the eurozone.

That meant that in the last year, 4.628 million people joined the ranks of the jobless, 2.787 million of whom were in the core euro area.

Spain's rate hit a massive 19.5 percent, although only very slightly up from the previous month.

Separate data from Madrid showed that the unemployment rate in Europe's fifth-largest economy soared to 18.83 percent throughout the fourth quarter of 2009, with a total of 4.326 million people out of work, up more than one million from a year ago.

Experts have repeatedly expressed fears of a "double-dip" recession on the Iberian peninsula -- itself struggling with huge deficits way above EU targets.

The news came on top of rising inflation -- with separate official figures showing the annual rate of price rises hitting 1.0 percent, at a time when the euro is losing ground against the dollar.

The value of the euro has slipped considerably from a November peak of 1.50 dollars to currently trade at under 1.40 dollars.

"Although the rise in Eurozone unemployment has slowed in recent months, it still seems poised to trend higher during much, if not all, of 2010," warned analyst Howard Archer of IHS Global Insight.

"This is likely to hold down wage growth and limit the upside for consumer spending," he underlined.

Archer said that "the current signs are" that the European Central Bank will keep interest rates down at 1.0 percent until "at least late-2010."

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