The European Union has faced an extremely difficult recovery, marred by painful austerity measures including increases in taxes, and much lower government spending. The skies are clearing, slowly, as periphery countries like Greece and Spain emerge from their deep depressions and political turmoil. There are currently still 19.2 million people unemployed throughout the Eurozone countries (those using the Euro currency – excluding its newest addition, Latvia), representing a 12.1% rate through November 2013. Though these numbers are still far higher than the desired rate, other economic data is presenting a more positive outlook. Retail trade within the Eurozone increased by 1.4% month-over-month, representing the biggest rise since November 2001. The increase comes mostly from non-food goods.
Unemployment For Under-25 Year-Olds Double That of the Population as a Whole
Those economies hardest hit by the recession are still facing the highest levels of unemployment. Unemployment for under-25 year-olds held at 24.2% for the zone. As far as overall unemployment, countries like Greece and Spain are still experiencing a huge lack of demand for labor, with 27.4% and 26.7% overall unemployment respectively. Still in the Eurozone, but at the other end of the spectrum, Austria’s unemployment rate is at 4.8% and Germany’s rate is 5.2%. The disparity in the economic strength among the Eurozone countries is the source of high tension in the European parliament, as well as in the individual countries’ governments. The wealthier countries have loaned hundreds of billions of Euros to prop-up those struggling, to the dismay of some of the right-wing nationalist political parties.
Retail Sales Led By Portugal
Portugal saw a 3.1% growth in its retail sales according to the most recent numbers, a very positive sign for a country that was among those hardest hit by the 2008 crisis. Germany and France both saw upticks in their retail sales as well, with a 1.5% and 2.1% increase respectively. The solid retail sales increase in both of Europe’s largest economies is a great sign says Howard Archer, the chief UK and European economist at IHS Global Insight calling the numbers, “a double dose of encouraging news for eurozone recovery prospects.” He added that the positive numbers point to a stabilizing Eurozone, and expects the European Central Bank (ECB) to discuss cutting interest rates, as inflation is also below 1%. The zone’s interest rate is currently at 0.25%, and Mr. Archer expects it to say there until 2015, after which he believes that a cut to 0.1% or even 0.0% is possible. The ECB will meet for its next policy meeting this Thursday.