Europe turns out more jobs this summer

In July 2013, for a second month in a row, unemployment rates remained unchanged in both Eurozone and the EU28 at 12.1% and 11% respectively, according to a Eurostat Press release issued today. Eurostat is the EU statistical service. The same source notes that, “26.654 million men and women in the EU28, of whom 19.231 million were in the euro area, were unemployed in July 2013”. Absolute numbers and percentages however don’t tell the whole story. Comparisons have more meaning. In this respect, compared with June 2013, the number of unemployed persons in July this year “decreased by 33 000 in the EU28 and by 15 000 in the euro area. Compared with July 2012, unemployment rose by 995 000 in the EU28 and by 1.008 million in the euro area”. On the base of the above Eurostat data it is very interesting to juxtapose monthly to yearly developments. It is obvious that the monthly decrease of unemployment (from June to July 2013) is quite marginal compared to the huge increases of the numbers of persons without a job between July 2012 and 2013. However this year’s July was a second month in row when month to month developments were positive, with a reduction of unemployment albeit restricted. Eurostat informed us on 31 July that in June 2013 in comparison with May 2013, the number of unemployed persons had also decreased by 32000 in the EU27 and by 24000 in the euro area. Short and long-term Again the positive month to month labour market developments in June and July this year cannot degrade the importance of the yearly losses of jobs. Nearly another million people in Eurozone and EU28 lost their jobs between the summer of 2012 and 2013. This is a fact that the importance and the significance of which can in no way be understated. Yet the positive monthly developments in June and July 2013 also have a strong meaning. Not to forget that more than one institutions, like the European Central Bank and the Commission, estimate that Eurozone and the EU28 have left behind the downward pointing part of the curve and have entered in a growth path albeit weak. It’s not only unemployment data that support this theory. GDP statistics for the second quarter of 2013 registered an increase of incomes and product of 0.3%. This may be a marginal development yet it is real and undeniable. GDP and employment Still the above discussion is about euro area and EU28 averages. Unfortunately arithmetic means do not tell the same truth for everybody. Developments in many member states are deplorable, supporting the theory of an increasing economic dualism between north and south within the European Union and the Eurozone. In July 2013 among the member states, “the lowest unemployment rates were recorded in Austria (4.8%), Germany (5.3%) and Luxembourg (5.7%), and the highest in Greece (27.6% in May 2013) and Spain (26.3%)”. Overall data also hide the truth about youth unemployment. “In July 2013, 5.560 million young persons (under 25) were unemployed in the EU28, of whom 3.500 million were in the euro area. Compared with July 2012, youth unemployment decreased by 53 000 in the EU28 and by 16 000 in the euro area”. As in the case of particular member state, data on youth unemployment are also appalling. However youth unemployment during June and July this year followed the general downward month to month trend and receded. Turn and twist it as one may the truth remains that unemployment has reached unheard before dimensions all over the southern part of Eurozone, without a visible reversal of this trend. There is a fact though that has a particular connotation and this is the evident inverse correlation between increases of GDP and unemployment. This comes as a surprise for those who believed that a long time lag will elapse before the resumption of economic activity in Europe will be felt in the labour market.