Euro Area: Unemployment rate stable in February
March 4, 2021
Labor market conditions in the common currency block weakened in February. The number of unemployed people increased by 48,000, while the unemployment rate remained steady at January’s 8.3% in February.
That said, short-time work schemes involving a considerable portion of the labor force across the Eurozone have prevented a jump in the unemployment rate.
Looking at countries with available data, four economies saw their unemployment rate decrease in February, including Germany and Italy. Meanwhile, six countries saw their unemployment rate increasing, including France and Spain. The rest saw a stable unemployment rate.
Disparities in the labor market among core and periphery countries persist. Spain is the economy with the highest unemployment rate (16.1%), followed by Greece (15.8%, data refers to December). At the other end of the spectrum, the Netherlands (3.6%), Malta (4.4%) and Germany (4.5%) have the lowest unemployment rates.
Commenting on the release, Bert Colijn, senior economist at ING, stated:
“How the labour market performs when the economic rebound starts remains a big question. A quick bounce back is unlikely given how employment usually recovers from a recession but also because furlough schemes still need to be wound down. Things are starting to look better though as businesses indicate improved hiring plans for the months ahead, especially in manufacturing. This provides further upside to the recovery prospects of the eurozone economy but we do stress that real employment recovery is unlikely before labour productivity recovers to pre-crisis levels. With furlough schemes still in place, that moment is still a while away.”