Eurozone unemployment unchanged at 8.3% in February

Government programmes to help businesses survive the crisis prevent jobless rate from soaring

A woman walks past a closed sportswear shop in Munich, Germany. The global economy is expected to grow 6 per cent this year, compared with a previous forecast of 5.5 per cent, according to the IMF. AsShow more

Eurozone unemployment remained stable at 8.3 per cent in February, as government programmes to help businesses survive the crisis stopped the jobless rate from escalating.

While the economic bloc's February unemployment rate was the same as January’s rate, according to the EU’s statistics agency Eurostat, it was up from 7.3 per cent recorded in February last year, just before the pandemic took hold.

It means 13.57 million people in the eurozone were out of work in February, a rise of 48,000 from January and an increase of 1.507 million from the same month last year.

"The eurozone’s unemployment rate was unchanged at 8.3 per cent in February despite virus measures being tightened, highlighting the extent to which government policies have protected jobs during the pandemic," said Jessica Hinds, Europe economist at Capital Economics.

"With this support set to continue, the risk of a surge in unemployment in 2021 is low."

Meanwhile, youth unemployment, which has risen more sharply during the crisis across the globe, edged down slightly to 17.3 per cent from 17.4 per cent the previous month. However, this remained higher than the 15.4 per cent out of work in February last year.

Unemployment in Europe surged in the spring of last year when the region was forced to introduce movement restrictions to curb the spread of Covid-19.

However, many governments in the economic block implemented EU-backed job guarantee schemes that have so far prevented a long-term shock on employment.

Ms Hinds said short-time work schemes have protected millions of jobs, with firms forced to rely on them during the latest round of restrictions, "albeit nowhere near as heavily as they did last spring".

"With restrictions set to remain in place for another couple of months at least, substantial government support for jobs is likely to continue for most, if not all, of this year," she said.

Separately, the unemployment rate for women in the eurozone increased to 8.8 per cent in February, from 8.7 per cent in January, while the rate for men was unchanged at 7.9 per cent.

In comparison, Britain's unemployment rate unexpectedly fell to 5 per cent in the three months to January despite many parts of the country entering a third Covid-19 lockdown.

The data from the Office for National Statistics earlier this month offered hope that that the UK can start to recover from its worst recession in 300 years.

The highest rates of unemployment in the eurozone were recorded in economies highly dependent on tourism, such as Spain, at 16.1 per cent. Germany, the eurozone's largest economy, had an unemployment rate of 4.5 per cent.

The Czech Republic and Poland had the lowest unemployment rates in the bloc, at just above 3 per cent.

Looking ahead, Ms Hinds expects the jobless rate to rise a little further over the next couple of quarters.

"Firms’ hiring intentions have rebounded from their level last spring, but they remain subdued and the generosity of government support is set to be tapered when activity picks back up," she said.

"In all, we expect the unemployment rate to creep back up over the next quarter or so, peaking at around 9 per cent."