Unemployment in the Euro zone countries climbed to 8% in December, the highest in over two and a half years, with the total number of jobless reaching 12.472 million in the Euro zone and 17.911 million in all the 27 EU member states according to a Eurostat study released on Friday
Inflation on the other hand dropped as the economic downturn intensified. Inflation in the 16 nations that use the Euro tumbled to an annual rate of 1.1% in January from 1.6% in December, Eurostat said in a first estimate. The dramatic decrease in oil prices from a year ago has been reducing the price index in recent months. Rising unemployment in the region is the most visible sign of recession as companies cut costs to cope with falling demand. Some 230,000 people lost their jobs in December, which marks the ninth consecutive monthly increase in unemployment. The rate last stood at 8% in April 2006 before the Euro zone economy started to speed up as it exported more to a booming global economy. Across the entire 27-nation European Union, unemployment was 7.4% in December, up slightly from 7.3% a month earlier. Spain now has the highest proportion of jobseekers in both the EU and the Euro area, with the rate hitting 14.4% in December. The collapse of a construction boom and falling tourist numbers have hit two of the country's biggest sectors. Austria with 3.9% and Netherlands with 2.7% have the lowest unemployment in the Euro zone. The European Commission forecasts that some 3.5 million jobs will disappear across the EU this year as the economy shrinks. It says unemployment could go over 10% by next year, the first time since 1998.