STOCK MARKET WATCH -- Monday, 2 April 2012

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32. Euro-Region Unemployment Surges to 14-Year High, Nears Record

http://www.bloomberg.com/news/2012-04-02/euro-region-manufacturing-contracts-for-eighth-month-in-march.html

Euro-region unemployment rose to the highest in more than 14 years and manufacturing contracted for an eighth month, adding to signs the economy probably slipped into a recession in the first quarter.

The jobless rate in the 17-nation euro area rose to 10.8 percent in February from 10.7 percent a month earlier, the European Union’s statistics office in Luxembourg said today. That’s the highest since June 1997 and close to the record of 10.9 percent. A manufacturing gauge, based on a survey of purchasing managers, fell to 47.7 in March from 49, Markit Economics said.

“Unemployment is lagging economic developments and the situation on the labor market will likely remain difficult through 2012,” said Jens Kramer, an economist at NordLB in Hanover, Germany. “Domestic demand is hurt by the difficult labor market and tougher austerity measures. The first and second quarters will show a contraction followed by a slight recovery.”

Europe’s economy has been mired in a fiscal crisis for more than two years, forcing companies to cut jobs and pushing economies from Spain to Ireland into recessions. While leaders awarded Greece a second aid package last month to help restore confidence, economic sentiment unexpectedly dropped in March. The European Commission forecasts the euro-area economy to shrink 0.3 percent this year.