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| Unemployment Climbs in Euro Zone | |
| (35 minutes later) | |
| PARIS — Unemployment in the euro zone continued to climb into record territory, official data showed Tuesday, with investors watching for possible new action by governments and the European Central Bank. | PARIS — Unemployment in the euro zone continued to climb into record territory, official data showed Tuesday, with investors watching for possible new action by governments and the European Central Bank. |
| The jobless rate in the 17-nation currency bloc rose to 11.8 percent in November from 11.7 percent in October, Eurostat, the statistical agency of the European Union, reported from Luxembourg. Eurostat estimates that about 18.8 million were in the euro zone, were unemployed in November – 2 million more than a year earlier, following a period of economic stagnation and budget-balancing measures. | The jobless rate in the 17-nation currency bloc rose to 11.8 percent in November from 11.7 percent in October, Eurostat, the statistical agency of the European Union, reported from Luxembourg. Eurostat estimates that about 18.8 million were in the euro zone, were unemployed in November – 2 million more than a year earlier, following a period of economic stagnation and budget-balancing measures. |
| A separate report from Eurostat showed that retail sales in the euro zone fell 2.6 percent in November from a year earlier, though they managed a 0.1 percent gain from October. | A separate report from Eurostat showed that retail sales in the euro zone fell 2.6 percent in November from a year earlier, though they managed a 0.1 percent gain from October. |
| The latest dire news for the euro zone economy comes as the governing council of the E.C.B. prepares to hold a policy meeting Thursday. A sharp dip in bank lending reported last week has already led some analysts to suggest that the central bank might try new steps to stimulate the economy, perhaps by cutting its benchmark lending rate from the current 0.75 percent. | The latest dire news for the euro zone economy comes as the governing council of the E.C.B. prepares to hold a policy meeting Thursday. A sharp dip in bank lending reported last week has already led some analysts to suggest that the central bank might try new steps to stimulate the economy, perhaps by cutting its benchmark lending rate from the current 0.75 percent. |
| Economists surveyed by Reuters expect the E.C.B. to leave policy unchanged Thursday, as the central bank waits for a clearer picture of the economic situation to emerge. | Economists surveyed by Reuters expect the E.C.B. to leave policy unchanged Thursday, as the central bank waits for a clearer picture of the economic situation to emerge. |
| Like their counterparts in the United States, Japan and Britain, the euro zone monetary authorities have already opened the spigots, allowing banks to borrow essentially as much as they want at the benchmark rate. Mario Draghi, the E.C.B. governor, has pledged to do whatever is necessary to ensure the stability of the euro, including buying the sovereign bonds of Spain and Italy to hold their borrowing costs to sustainable levels. | Like their counterparts in the United States, Japan and Britain, the euro zone monetary authorities have already opened the spigots, allowing banks to borrow essentially as much as they want at the benchmark rate. Mario Draghi, the E.C.B. governor, has pledged to do whatever is necessary to ensure the stability of the euro, including buying the sovereign bonds of Spain and Italy to hold their borrowing costs to sustainable levels. |
| The central bank’s attitude has succeeded in calming markets and driving down government bond yields for embattled countries. The European Commission reported Tuesday that an index of economic sentiment in the euro zone had improved in December by 1.3 points, to 87.0. “Economic sentiment in the euro area improved among consumers and across all sectors, except retail trade,” the commission reported. | The central bank’s attitude has succeeded in calming markets and driving down government bond yields for embattled countries. The European Commission reported Tuesday that an index of economic sentiment in the euro zone had improved in December by 1.3 points, to 87.0. “Economic sentiment in the euro area improved among consumers and across all sectors, except retail trade,” the commission reported. |
| Gilles Moëc, an economist at Deutsche Bank in London, said the data Tuesday were consistent with expectations that the euro zone economy would remain in recession through the winter, with the unemployment rate possibly rising to as high as 12.4 percent. “We’re still far below the level of growth that would stabilize the labor market,” he said. | Gilles Moëc, an economist at Deutsche Bank in London, said the data Tuesday were consistent with expectations that the euro zone economy would remain in recession through the winter, with the unemployment rate possibly rising to as high as 12.4 percent. “We’re still far below the level of growth that would stabilize the labor market,” he said. |
| But he added that the commission’s economic sentiment report, as well as recent surveys of purchasing managers, suggested that the downturn in the manufacturing sector had “bottomed out,” making possible a return to growth later in the year. | But he added that the commission’s economic sentiment report, as well as recent surveys of purchasing managers, suggested that the downturn in the manufacturing sector had “bottomed out,” making possible a return to growth later in the year. |
| “External demand seems to be holding up better than we had thought,” Mr. Moëc said. “Now we are to a large extent dependent on what happens in the United States,” he said, referring to the negotiations over the budget. | “External demand seems to be holding up better than we had thought,” Mr. Moëc said. “Now we are to a large extent dependent on what happens in the United States,” he said, referring to the negotiations over the budget. |
| The president of the European Commission, José Manuel Barroso, said Monday in Lisbon that “the existential threat against the euro has essentially been overcome. ” | The president of the European Commission, José Manuel Barroso, said Monday in Lisbon that “the existential threat against the euro has essentially been overcome. ” |
| “In 2013 the question won’t be if the euro will, or will not, implode,” he said. | “In 2013 the question won’t be if the euro will, or will not, implode,” he said. |
| Europe also got a vote of confidence from Tokyo on Tuesday, as Finance Minister Taro Aso said Japan would buy bonds of the European Stability Mechanism, the euro zone bailout fund, as well as euro sovereign debt. | Europe also got a vote of confidence from Tokyo on Tuesday, as Finance Minister Taro Aso said Japan would buy bonds of the European Stability Mechanism, the euro zone bailout fund, as well as euro sovereign debt. |
| “The financial stability of Europe will help the stability of foreign exchange rates, including the yen,” Mr. Aso was quoted by the Nikkei newspaper as saying. | “The financial stability of Europe will help the stability of foreign exchange rates, including the yen,” Mr. Aso was quoted by the Nikkei newspaper as saying. |
| Attacking joblessness may require governments to ease back on austerity measures that many economists, including some at the International Monetary Fund, say might have gone too far. In France, President François Hollande has vowed to turn around the flagging labor market in France, where, according to Eurostat, unemployment as 10.5 percent in November. | Attacking joblessness may require governments to ease back on austerity measures that many economists, including some at the International Monetary Fund, say might have gone too far. In France, President François Hollande has vowed to turn around the flagging labor market in France, where, according to Eurostat, unemployment as 10.5 percent in November. |
| Eurostat said Spain, suffering from the collapse of a property bubble and struggling to cope with tough austerity measures, had the highest unemployment rate in the euro zone, at 26.6 percent. Greece, the beleaguered country where the sovereign debt crisis began, was next at 26.0 percent, according to September data. Austria, at 4.5 percent, tiny Luxembourg, at 5.1 percent, and Germany, at 5.4 percent, were the lowest. | Eurostat said Spain, suffering from the collapse of a property bubble and struggling to cope with tough austerity measures, had the highest unemployment rate in the euro zone, at 26.6 percent. Greece, the beleaguered country where the sovereign debt crisis began, was next at 26.0 percent, according to September data. Austria, at 4.5 percent, tiny Luxembourg, at 5.1 percent, and Germany, at 5.4 percent, were the lowest. |
| Worryingly, youth unemployment continues to grow, with 5.8 million people under 25 classified as jobless in November, up 420,000 from a year earlier. | Worryingly, youth unemployment continues to grow, with 5.8 million people under 25 classified as jobless in November, up 420,000 from a year earlier. |
| James Kanter in Brussels and Hiroko Tabuchi in Tokyo contributed reporting. | James Kanter in Brussels and Hiroko Tabuchi in Tokyo contributed reporting. |