Unlike the strong recovery seen in the US jobs data, unemployment rate in the Eurozone registered a very small dip in May 2014 as compared to previous month’s data. The total jobless rate remained stagnant at 11.6% with around 18.5 million workers still struggling to find employment.
The unemployment data indicated the stark disparity between the economic recovery of Northern and Southern parts of Europe. Germany suffered a jobless rate of just 5.1% while countries like Italy and Spain faced unemployment of higher magnitude at 12.6% and 25.1% respectively.
Rate of unemployment amongst youngsters too showed no signs of abating with 23.3% unemployment in the continent. Southern European countries like Greece and Spain fared badly in this parameter as well.
Experts indicated that the recovery in the economy was not strong enough to absorb the excess supply in the labor market. The unemployment problem was exacerbated by weakening of manufacturing growth in the Eurozone for the month of June 2014.
Purchasing Managers’ Index (PMI) for manufacturing fell from 52.2 in May to 51.8 in June. This was the lowest reading since November 2013. While the figure is above 50, which marks the point where growth ends and contraction begins, the final data was less than the preliminary estimate of 51.9.
The PMI data is derived from a survey of 3000 manufacturing firms, updated on monthly basis, and is considered an authoritative representation of the condition of the economy. The PMI data accentuates the perception that Eurozone’s economic recovery is fragile and that the European Central Bank (ECB) needs to do a lot more to prevent the recovery from losing steam.
Experts opine that ECB’s move to introduce negative interest rates last month has not had the desired impact and that further measures may be unavoidable to stimulate movement of money into the stagnating economy of the Eurozone.