Euro Area: Unemployment rate rises modestly in April amid massive short-time work schemes and as people held off searching for jobs

Euro Area Unemployment April 2020

Euro Area: Unemployment rate rises modestly in April amid massive short-time work schemes and as people held off searching for jobs

Labor market conditions in the common currency bloc worsened sharply in April, the second month when COVID-19 containment measures were extensively imposed, although data released by Eurostat shows just a small portion of the deterioration. The number of unemployed people jumped by 211,000, and the unemployment rate increased to 7.3% in April from a revised 7.1% in March (previously reported: 7.4%).

Short-time work schemes involving a massive portion of the labor force across the Eurozone prevented the unemployment rate from skyrocketing in April. Moreover, discouraged people abandoning the active population further contributed to contain jobless numbers.

That, said, looking at the countries with data available, 13 economies saw their unemployment rate increase in April, including France, the Netherlands and Spain. Meanwhile, Austria and Germany saw their unemployment rate unchanged, while Italy’s unemployment continued to fall, although it was again due to a sharp drop in the active population.

Disparities in the labor market among core and periphery countries persist. Greece is the economy in the Eurozone with the highest unemployment rate (16.1%, data refers to February), followed by Spain (14.8%). At the other end of the spectrum, the Netherlands (3.4%), Germany (3.5%) and Malta (4.0%) have the lowest unemployment rates.

Commenting on the release, Bert Colijn, Eurozone senior economist, stated:

“As the recovery is likely going to last for quite some time, unemployment is set to rise significantly although short-time work will help output to recover more quickly once demand returns.”

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