Eurozone Unemployment Rises Less Than Expected

Despite a deep recession, the euro area jobless rate rose only marginally in May as the short-time work programs of member countries to support jobs amid the downturn caused by the coronavirus pandemic suppressed actual unemployment.

The unemployment rate climbed to 7.4 percent in May from 7.3 percent in April, data released by Eurostat showed Thursday. In the same period last year, the jobless rate was 7.6 percent.

However, the unemployment rate was below the economists' forecast of 7.7 percent.

The number of people out of work increased by 159,000 persons from April to 12.146 million in May.

The unemployment rate among the euro area youth aged below 25 increased to 16 percent in May from 15.7 percent in April.

Furlough schemes across the member countries helped to prevent people from becoming unemployed altogether.

In the months ahead, the surprisingly stable Eurozone unemployment rate is likely to continue to creep up, Bert Colijn, an ING economist said.

This is simply because the economy is unlikely to reach the level of pre-crisis output anytime soon, leading to inevitable job losses especially when short-time work schemes draw to a close, the economist added.

In the EU27, the jobless rate increased marginally to 6.7 percent from 6.6 percent in April.

Data released by Spain's labor ministry showed that unemployed rose by 5,107 or 0.1 percent from the previous month, which was the first increase in June since 2008.

Germany's unemployment also increased at a much slower pace in June due to the short-time work program. Unemployment increased by 69,000 in June, official data showed Wednesday.

However, in Italy, the jobless rate rose to 7.8 percent from 6.6 percent in April, the statistical office Istat reported Thursday.