Another Signal of Euro Zone Slowdown, Spanish Unemployment at 24.4%

Arthi Gupta
27 Apr, 2012
New York City

The latest release of the confidence data offered another evidence of economic slowdown and Spain said unemployment soared to 24.4%, the highest in the region. Bond yields of Spain and Italy advanced for the second week in a row as the governments race to complete 60% of annual debt target.

[R]2:00 PM Frankfurt – The latest release of the confidence index in the euro zone offered another evidence of economic slowdown in the region and Spain said unemployment soared to 24.4%, the highest in the region. Bond yields of Spain and Italy advanced for the second week in a row as the governments race to complete 60% of annual debt target.[/R]

Italian Bond Auction

Italy sold €5.95 billion of bonds today at higher borrowing costs.

The Treasury sold the September 2022 10-year bond at an average yield of 5.84% compared to 5.24% in the previous auction on March 29. The bid-to-cover ratio declined to 1.48 from 1.65 a month ago.

The Treasury also sold €2.42 billion of five-year debt at an average yield of 4.86% compared with 4.18% at the last auction in March. The bid-to-cover fell to 1.34 from 1.65.

Italy also sold around €1 billion of bonds maturing in April 2016 and February 2019 to yield 4.29% and 5.21% respectively.

Euro-zone Leading Index Falls

A leading indicator of the euro-zone economy declined 0.3% from a month ago to 105 in March, data from a survey by the Conference Board showed today.

The coincident economic index, which measures the current situation, declined 0.1% sequentially to 102.3 in March.

Spanish Jobless Rate Soars

The unemployment rate in Spain rose to 24.44% in the first quarter, the highest in the euro area, from 22.85% in the fourth quarter of 2011, data from the statistics office INE showed today.

The number of unemployed increased to 5.639 million in the first quarter from 5.273 million in the previous quarter.

Separately, Spain''s inflation, as measured by the harmonized index of consumer prices, rose 2% annually in April from 1.8% in March, flash estimate released by the statistics office INE showed.

The final April reading is due on May 11.

French Unemployment Continues

The number of registered job seekers in France rose to 2.88 million in March, the highest total since September 1999, according to data released by the labor ministry yesterday. The jobless rate climbed 0.6% in March from February.

Separately, French consumer spending dropped 2.9% from a month ago in March, reversing a downwardly revised 2.9% gain in February.

German Sentiment to Drop

German consumer sentiment is to ease in May, a survey by market research group GfK showed today.

The forward-looking consumer confidence index dropped to 5.6 in May from a revised value of 5.8 in April. This means that the consumer climate has decreased for the second time in a row.