Eurozone jobless rate unexpectedly rises to 6.5%

Unemployment in the Eurozone unexpectedly increased in September, with analysts expecting joblessness to rise further in the coming months.

The number of unemployed people in the single-currency area rose by 69,000 from August's record low to 11.02m, according to figures released Friday from Eurostat.

That took the jobless rate up to 6.5%, down from 6.7% in September 2022 but up from 6.4% in August 2023. Analysts were expecting no change.

The rate of youth unemployment – defined as those out of work under the age of 25 who have actively sought employment in the past month – rose to 14%, from 13.9% the previous month.

The highest rates of unemployment were seen in Spain (12%), Greece (10%) and Italy (7.4%), while the lowest were in the Czech Republic (2.7%), Malta and Poland (both at 2.8%).

"Looking ahead, we think EZ unemployment will rise further over the coming months, as GDP falters and survey data suggest firms have started to shed workers, particularly in manufacturing," said Melanie Debono, senior Europe economist at Pantheon Macroeconomics.

"The advance claims-based data from Germany for October, published yesterday, showed that the claims-based unemployment rate rose, as reported claims jumped by 30K, supporting this message. We look for the EZ unemployment rate to rise to around 6.8% by March next year."