Think Jobs are Hard to Find in the U.S.? Try Heading to Europe

Andrew Klips  |

On June 7, 2013, the U.S. Department of Labor reported that the U.S. created 175,000 jobs in May and the nation’s unemployment rate ticked up to 7.6 percent from 7.5 percent in April as more people were actively seeking work.  In the broad picture, the figures were weak compared to the 207,000 new jobs per month that were averaged in the first quarter and even the 180,000 monthly average of new jobs for all of 2012.  As such, the stock markets rejoiced, believing that the soft number will keep the Federal Reserve buying-up $85 billion each month in Treasuries and mortgage-backed securities and keeping short-term interest rates at extremely low levels.

While finding a job in the USA may not exactly be the easiest thing in the world, it’s a far cry better than it is for Europeans.  

Eurostat, the European Union’s statistics agency, reported on Friday that employment dropped 0.5 percent in the first quarter compared to the fourth quarter of 2012, a period in which employment declined by 0.3 percent.  Compared to the first quarter of 2012, 1.0 percent fewer people had jobs in the 17-nation euro zone.

The agency estimates that 145.1 million people in the euro zone were working during the first quarter.  That’s the lowest number since the fourth quarter of 2005.

Greece and Portugal posted the worst declines in job rates with slides of 2.3 percent and 2.2 percent, respectively.

At the end of May, Eurostat said that unemployment in the euro zone rose again in April to make a new record high, edging up to 12.2 percent from 12.1 percent in March.  This means that 19.4 million people were out of work.  For the 27-nation European Union, the unemployment rate was 11.0 percent in April, flat from March, but up fro 10.3 percent in April 2012.

People under 25 are struggling to find a job, with nearly one-quarter of job seekers in the euro zone falling into that demographic.  In debt-riddled Greece, 62.5 percent of people under 25 looking for jobs can’t find one.

Some stronger countries, however, have helped temper the overall euro zone jobs data.  Germany, the biggest economy in Europe, has seen its unemployment rate steadily creep back down to pre-recession levels.  In April, Germany’s unemployment rate held at 5.4 percent.  Austria has also been strong with an unemployment rate of only 4.9 percent, the lowest rate in the euro zone.

The European Central Bank kept key interest rates unchanged in May at a record low of 0.5 percent.  Unlike the U.S. and the U.K., the ECB has been resistant to taking even greater steps to stimulate the ailing economy, although President Mario Draghi has suggested that additional efforts may be coming, such as lending more money to banks, dropping rates further or softening collateral regulations.

Stocks in the States have come out flat in Friday trading in light of the jobs info from Europe and a report from the U.S. Federal Reserve showing that industrial production was unchanged during the month of May (shy of economist predictions of a 0.1% increase).  The Dow Jones Industrial Average, S&P 500 and Nasdaq are all seesawing within a few points between positive and negative territory.

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