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Stagflation: Eurozone Unemployment Hits Record High As Inflation Rises Above Expectations

Tyler Durden's picture





 

Spot the divergence in the chart below, which compares the unemployment rate in the Eurozone and in the US.

In July European unemployment rose to 11.3% - a record post-Euro rate, and the highest since 1990 for the constituent countries. While this was in line with estimates, what surprised the market, and has sent the EUR paradoxically higher (paradoxically, because all a continent in stagflation, which Europe by now most certainly is, is to have its currency rise just when it needs to export more goods, in the process entrenching its economic plight even further) is that inflation in August picked up from 2.4% to 2.6%, beating expectations of a 2.5% increase, allowing the European misery index to stand head and shoulders above the rest of the world.

From Bloomberg:

Euro-area unemployment rose to a record and inflation quickened more than economists forecast as rising energy costs threaten to deepen the economic slump.

 

The jobless rate in the economy of the 17 nations using the euro was 11.3 percent in July, the same as in June after that month’s figure was revised higher, the European Union’s statistics office in Luxembourg said today. That’s the highest since the data series started in 1995. Inflation accelerated to 2.6 percent in August from 2.4 percent in the prior month, an initial estimate showed in a separate report. That’s faster than the 2.5 percent median forecast of 31 economists in a Bloomberg survey.

 

A 12.4 percent surge in crude-oil prices over the past two months is leaving consumers and companies with less money to spend just as governments seek ways to contain the debt crisis. European economic confidence dropped more than economists forecast to a three-year low in August and German unemployment increased for a fifth month, adding to signs the euro-area economy continued to shrink in the third quarter.

 

“The whole euro zone is undergoing negative growth developments,” Don Smith, a London-based economist at ICAP Plc, told Ken Prewitt on Bloomberg Radio yesterday. “The sense is that increasingly the euro-zone crisis is bearing down on countries in northern Europe and Germany in particular and this is really forcing officials’ hands toward coming up with a firm solution.”

And while the economy continues imploding, the ECB, like a true headless chicken, is scrambling to release one after another more and more meaningless rumor, which does nothing to restore credibility to the Goldman-headed money printing institution (which can't even do that without a German green light), and instead of attempting to halt the rise of inflation, or do anything about unemployment which month after month rises ever higher, is instead desperate to continue herding cats, and do everything to delay the inevitable exit of Greece, and soon thereafter many others, from the world's most artificial construct.

 


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Fri, 08/31/2012 - 07:03 | Link to Comment Colombian Gringo
Colombian Gringo's picture

Time for regime change in  Europe. Banksters out!

Fri, 08/31/2012 - 07:20 | Link to Comment Tommy Gunner
Tommy Gunner's picture

The problem is - there is NO solution to what ails Europe - unless of course you consider defaults on an epic scale a solution

Fri, 08/31/2012 - 08:17 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

Eurozone Unemployment Hits Record

 

Wow....totally didn't see it coming!

 

Fri, 08/31/2012 - 08:31 | Link to Comment Rip van Wrinkle
Rip van Wrinkle's picture

That is the solution. Piece o' cake, ain't it!!

Fri, 08/31/2012 - 11:02 | Link to Comment foodstampbarry
foodstampbarry's picture

Ran out of other people's money bitchez!

Fri, 08/31/2012 - 07:09 | Link to Comment fonzannoon
fonzannoon's picture

The futures are really spotting Bernak an 8 point leas on the ES? Really?

Fri, 08/31/2012 - 07:54 | Link to Comment Chuck Walla
Chuck Walla's picture

They really need lessons from the BLS on how to manipulate stats better than this.

 

FORWARD SOVIET!

Fri, 08/31/2012 - 07:10 | Link to Comment Dow100000
Dow100000's picture

Gold bitchez!!!

Fri, 08/31/2012 - 07:12 | Link to Comment LongSoupLine
LongSoupLine's picture

 

 

"If you look at this chart, you will clearly see who has more iPads" - Dudley

Fri, 08/31/2012 - 07:40 | Link to Comment q99x2
q99x2's picture

Must be getting the HFTs connected in the lower floors of EU exchanges. The dark force is at work this morning.

Fri, 08/31/2012 - 07:40 | Link to Comment kaiten
kaiten's picture

So US is doctoring numbers a bit better than Europe.

Fri, 08/31/2012 - 07:43 | Link to Comment youngman
youngman's picture

There are solutions....just painful ones....cut expenses for one...Socialism does not work...cut expenses...cur rules...regulations..fees..licenses...taxes...tafifs...all the government costs that weigh down the individual...and default...banks will go broke....that is good...we do not need as many as we have..let the market work...

Fri, 08/31/2012 - 07:52 | Link to Comment samcontrol
samcontrol's picture

I am sick of people saying let the banks fail. No money in atms after a week is not my vision of let the market work.

Maybe you prepared for such caos but most have not , so try not to be a selfish prick and look at the outcome of your wishes.

Socialism is in every country big time so fucking deal with it , i do.

Fri, 08/31/2012 - 08:33 | Link to Comment Rip van Wrinkle
Rip van Wrinkle's picture

These f'ing shysters have had 3 years to set up new, clean banks. And what have they done?? Made the pile of shite even bigger. Turds.

Fri, 08/31/2012 - 09:38 | Link to Comment phat ho
phat ho's picture

lol

Fri, 08/31/2012 - 07:52 | Link to Comment samcontrol
samcontrol's picture

I am sick of people saying let the banks fail. No money in atms after a week is not my vision of let the market work.

Maybe you prepared for such caos but most have not , so try not to be a selfish prick and look at the outcome of your wishes.

Socialism is in every country big time so fucking deal with it , i do.

Fri, 08/31/2012 - 08:09 | Link to Comment Ghordius
Ghordius's picture

<sigh> where to start...

"And while the economy continues imploding, the ECB, like a true headless chicken,..." 

 it's not headless, it has 17+ heads (not necessarily an improvement, on a chicken)


"...is scrambling to release one after another more and more meaningless rumor,..."

the rumors come from several sides, govs, parties, newsies and banks at the forefront


"which does nothing to restore credibility to the Goldman-headed money printing institution (which can't even do that without a German green light),..."

so is it GS driven or German driven or headless? I'd say it makes a difference, IMHO

 

"...and instead of attempting to halt the rise of inflation,..."

eh, it's not there yet, remember? except a 4%+ in Malta. and there is this little thing with the hot USD waves sloshing around in search of a bit of profit. raise the rates and whooosh, all the Money Market Funds et al are back in force

 

"...or do anything about unemployment which month after month rises ever higher,..."

on ZH you can read a few very good articles on the fact that unemployment is not the ECB's concern. the dual mandate applies only to the FED. Again, the ECB's explicit job is to keep inflation near 2%. Period. Of course, preventing the implosion of whole banking systems by LTRO was not explicit, and we can discuss if it was implicit (with a lenghty discussion on continental european central bank traditions) but this was meant to be the core of the message here, and, I'm really sorry, IT DOES NOT APPLY.

 

"...is instead desperate to continue herding cats,..."

desperation? you have not seen desperation, yet


"...and do everything to delay the inevitable exit of Greece,..."

which still is not there, not wanted in Greece and would - according to so many - propel the EUR higher


"...and soon thereafter many others, from the world's most artificial construct."

Now this is a nice theory. How this? A bundle of 17 currencies/cbs is more artificial than what? a bit of demagogy, here? I'd say that a CB that tries to keep gold down and unimportant is a bit more artificial than the opposite, but, well, most of us live in artificial abodes, so fine, suit yourself.

Fri, 08/31/2012 - 08:43 | Link to Comment orangegeek
orangegeek's picture

And the Euro keeps rising against the US Dollar.  Must be some unreported prosperity and growth going on in Europe.

 

Either that or the algos are at it again.

 

 

Fri, 08/31/2012 - 09:59 | Link to Comment iamtheeggman wh...
iamtheeggman whooooooooooooo's picture

WTF is with the Euro today? Spiked up to 1.26.....???

Fri, 08/31/2012 - 10:31 | Link to Comment Pairadimes
Pairadimes's picture

All this chart says is that Europe is no where near as good at lying with data as the BLS.

Fri, 08/31/2012 - 12:19 | Link to Comment Jim B
Jim B's picture

You read my mind!

Do NOT follow this link or you will be banned from the site!