Euro Area Jobless Rate at 12-Year High

Arthi Gupta
31 Aug, 2010
New York City

The European markets declined after euro-zone inflation eased to 1.6% in August. The euro area unemployment rate rose to a twelve-year high in July. The OECD annual inflation increased in July. German jobless rate remained stable at 7.6% in August.

[R]4:00 PM Frankfurt – The European markets declined after euro-zone inflation eased to 1.6% in August. The euro area unemployment rate rose to a twelve-year high in July. The OECD annual inflation increased in July. German jobless rate remained stable at 7.6% in August.[/R]

U.S. and Asian markets fell.

French housing starts rose in the three months to July. Italy’s inflation dropped to 1.6% in August and jobless rate fell in July and Spain’s current account deficit widened in June.

Moody''s retained negative outlook for Denmark’s banking system.

In Paris CAC 40 Index decreased 32.42 or 0.93% to close at 3,454.59 and in Frankfurt DAX Index edged lower 40.67 or 0.69% to close at 5,871.74.

Euro-zone annual consumer price inflation eased in August, according to a preliminary report published by the Eurostat today.

The consumer price index rose 1.6% year-on-year in August compared to a 1.7% rise in July. The European Central Bank targets inflation rates of “below, but close to, 2%” over the medium term.

The euro area''s unemployment rate remained unchanged at 10% in July for a fifth month, the highest in 12 years, according to official figures released today.

Eurostat said a total of 15.8 million people were registered unemployed in the euro-zone, with the number of unemployed decreasing by 8,000 compared to the previous month. The male unemployment rate was at 9.8%, while the female unemployment rate was 10.3%.

In the EU, the unemployment rate was 9.6% in July, unchanged from June.

The OECD area annual inflation increased in July, according to a report released by the Organization for Economic Co-Operation and Development today.

The consumer price index rose 1.6% year-on-year in July compared to 1.5% in June.

Food prices increased 1.1% annually in July, compared to a 0.6% rise in the previous month. Similarly, energy price inflation rose to 6.2% in July from 4.7% in June.

Moody''s Investors Service retained negative outlook for Denmark''s banking system. The rating agency said there is uncertainty regarding the banks'' medium-term liquidity due to phasing-out of the extraordinary government support that has assisted the banks over the past two years.

Germany''s unemployment rate remained stable at 7.6% in August, according to data released by the Federal Labor Agency today. The number of unemployed persons fell by 17,000 in August after falling 21,000 in July. This was the 14th straight month of decline in unemployment in a row.

The number of employed people in Germany totaled 40.2 million in July, an increase of 141,000 or 0.4% from the same month a year ago. Compared with June, the number of employed persons fell by 65,000 or 0.2%.

According to the Federal Statistics Office, German unemployment according to the concept of the International Labor Organization decreased seasonally adjusted 330,000 persons or 10.1% year-on-year to 2.96 million in July.

The French Housing Ministry released data today that showed housing starts rose 1.3% to 82,842 in the three months to July compared to the same period a year ago. In the 12-month period to July, housing starts decreased 3.9% to 338,152.

Housing approvals increased 28.6% in the three months to July to 123,250. In the twelve months to July 2010, housing approvals were up 5.3% to 438,900.

Spain’s current account deficit widened in June from the previous year, according to a report released by the Bank of Spain today.

The current account deficit widened to €3.58 billion in June as against a €3.48 billion deficit last year. This was mainly due to rise in trade deficit from the previous year and decline in services surplus, the report showed. The trade deficit widened to €4.08 billion in June from €2.80 billion a year ago.

Italy''s consumer price inflation fell to 1.6% in August from 1.8% in June, according to a report released by the statistics office Istat today.

The seasonally adjusted jobless rate in Italy edged lower to 8.4% in July as against 8.5% in June, according to figures released by the statistics office Istat today.

The number of unemployed persons totaled 2.11 million in July, while the number of employed totaled 22.89 million.

Gainers & Losers

Air Liquide SA fell 1.46% to €80.48 after the industrial gases producer said it is investing around €60 million in new production units in the Middle East.

AstraZeneca Plc dropped 0.40% to $49.45 after the pharmaceutical group said that the FDA asked its biologics unit MedImmune for more data on its drug motavizumab, a monoclonal antibody being developed to help prevent serious respiratory syncytial virus diseases.

BAE Systems plc declined 1.21% to 292.90 pence after the defense contractor won a $629 million fixed-priced delivery contract from the U.S. Department of Defense.

Carrefour S.A. edged lower 1.19% to €35.68 after the French retailer reported first-half sales rose 6% to €43.7 billion. Net profit generated in the period was €82 million compared to a net loss of €58 million recorded in the year-earlier period.

Hermes International S.A. slumped 4.08% to €140.95 after the French high-end fashion house reported net profit soared 55.2% to €194.6 million from €125.4 million a year ago. Operating profit rose 52.4% to €304.5 million from €199.8 million over the same period last year.

HSBC Holdings Plc gained 0.25% to 638.60 pence after the global banking and financial services company announced the completion of the sale of its remaining U.S. consumer finance auto loan run-off portfolio to Santander Consumer USA Inc.

Iliad S.A. rose 1.47% to €70.52 after the French Internet company said first-half profit more than doubled.

Raiffeisen International Bank-Holding AG tumbled 2.42% to €32.35 after the Austria-based holding company for Raiffeisen Zentralbank Oesterreich AG missed net income estimations.