Monday, April 2, 2012

Eurozone unemployment highest since creation of the euro, but the data looks suspect

The European Commission's Eurostat published the EU and the Eurozone unemployment numbers today. According to Eurostat the Eurozone unemployment is now at 10.8%, a level not seen since 1997. The last time the unemployment rate was this high, the euro did not yet exist. This helps explain the double-dip consumer recession already in place.

EU and Eurozone unemployment (source: Eurostat)

One of the scarier components of the latest result is the spike in EU's and Eurozone's youth unemployment. Both are above 21% and trending higher.

EU and Eurozone youth (ages 15-24) unemployment (source: Eurostat)

There is one unsettling point about the Eurostat unemployment data however. If you zoom in on the Eurozone unemployment rate most recent data, the chart is actually a straight line. A straight line in any monthly data is a suspect. But in a seasonally adjusted unemployment measure for the whole of Eurozone that increases by exactly 10bp for 8 months in a row just looks "smoothed".  People suspect China of cooking economic numbers, but the European Commission? If anyone has an explanation, send/post your comment.

Eurostat's unemployment rate in the Eurozone- recent data (Bloomberg)
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