LONDON — Unemployment in the euro zone continued its relentless march higher in April, according to official data published Friday, hitting yet another record amid a prolonged recession and the lack of a coordinated response by policy makers.
The jobless rate for the 17 countries that use the common currency rose to 12.2 percent, from 12.1 percent a month earlier, with 19.4 million people out of work, according to Eurostat, the E.U. statistics agency. Nearly a quarter of job-seekers under age 25 were unemployed. Some analysts said the jobless rate could hit 20 million by the end of the year.
Despite the rise, most analysts do not expect the European Central Bank to cut interest rates or take other action to stimulate growth when its policy-making council meets in the coming week. Separate data from Eurostat showed that inflation in the euro zone rose to 1.4 percent from 1.2 percent, which could prompt the E.C.B. to wait for clearer signs that there is no risk of higher prices.
Analysts said the continued rise in youth unemployment was particularly alarming. It reached 62.5 percent in Greece and 56.4 percent in Spain in April, Eurostat said, threatening to become a long-term drag on growth as young people are unable to start their careers.
“Youth joblessness at these levels risks permanently entrenched unemployment, lowering the rate of sustainable growth in the future,” Tom Rogers, an economist who advises the consulting firm Ernst Young, said in an e-mail message.
A decision by E.U. leaders to allow distressed countries more time to cut their government budgets will help, he said, as would a cut in the benchmark interest rate by the E.C.B. last month. But Mr. Rogers added, “Much more remains to be done to stimulate a recovery.”
For the moment, though, there is little prospect of major additional stimulus from governments or the E.C.B. The central bank remains reluctant to undertake more radical measures like those used by the U.S. Federal Reserve or the Bank of England. The E.C.B. benchmark interest rate is already at a record low of 0.5 percent, and it is unlikely that a further cut would do much to relieve a credit crunch in countries like Italy.
The E.C.B. aims for inflation of about 2 percent, and still has room for additional measures without violating its mandate to maintain price stability. But the uptick in inflation reported Friday, caused primarily by a rise in prices for food, alcohol and tobacco, could quiet those who have argued that the euro zone is in danger of sinking into deflation, a sustained decline in prices that can be even more destructive than inflation because it is so hard to reverse.
In one bit of good news, unemployment in Ireland fell to 13.5 percent, from 13.7 percent, and down from 14.9 percent a year earlier. The improvement is a sign that Ireland is slowly recovering from the banking and debt crisis that began in 2008.
Article source: http://www.nytimes.com/2013/06/01/business/global/euro-zone-economic-data.html?partner=rss&emc=rss
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