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Euro-Area Unemployment Rate Rises to new record of 11.8%
Howard Richman, 1/8/2013

The decision of the euro-area countries to try to fix their trade-deficit-caused depression without balancing trade still isn't working. Bloomberg reports that the European jobless rate is at its highest level ever:

Unemployment in the 17-nation region rose to 11.8 percent from 11.7 percent in October, the European Union’s statistics office in Luxembourg said today. That’s the highest since the data series started in 1995 and in line with the median estimate of 27 economists in a Bloomberg News survey.

The euro-area economy has shrunk for two successive quarters and economists foresee a further decline in gross domestic product in the final three months of last year, forcing companies to cut costs by slashing jobs. The European Central Bank estimates contractions of 0.5 percent and 0.3 percent in 2012 and 2013.

“In the southern areas of the euro zone, demand is very weak and therefore there is no way to see fundamental improvement in labor-market conditions,” said Uwe Duerkop, an economist at Landesbank Berlin. “There might be some stabilization in the labor market in the second half of the year where one can expect this trend of growing unemployment numbers to stop, but that’s not the story for the moment.”

These Southern European countries are experiencing the high unemployment rate that comes from persistent trade deficits. Here is a graph that we put together several months ago based upon the statistics then available:

The solution is simple. The Southern European countries need to pull out of the Eurozone so that they can readopt their own individual currencies so that they can balance trade.

But that would disrupt the progressive agenda which awards these countries a Nobel Peace Prize for joining together in a self-destructive pact.

Comment by Tony, 1/11/2013:

uro-area economy has shrunk for two successive quarters and economists foresee a further decline in gross domestic product in the final three months of last year, forcing companies to cut costs by slashing jobs