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Eurozone unemployment will remain close to these record levels for some time, warns Howard Archer of IHS Global Insight.

He writes: While signs of stabilizing labor markets is relatively encouraging, unemployment remains worryingly high across the Eurozone and it seems unlikely to come down markedly any time soon.  Although the Eurozone has been growing slightly since the second quarter of 2013, economic activity will likely remain too limited in the near term at least to generate many jobs. Furthermore, while business confidence across the Eurozone has generally improved appreciably in recent months, many firms remain wary of the outlook. Firms are also aware of how difficult and costly it can still be to shed labor in some countries which can deter taking on new workers.

Eurostat, the EU's statistics office, said the eurozone's unemployment rate held steady in November at a record 12.1 percent for the eighth month running after a modest 4,000 rise in the ranks of the jobless to 19.24 million. Since September's 12.2 percent rate was revised down, 12.1 percent is now the record.

The agency also said retail sales during the month spiked by 1.4 percent, way ahead of predictions in the markets for a more modest increase of around 0.3 percent. The rise was the biggest since November 2011.
Though much of the increase was due to a 2.1 percent rise in France, where consumers may have brought forward purchases ahead of a sales tax rise, analysts said the figures suggest households are increasingly confident that the financial crisis is past its worst and that the recovery has legs.

The increase followed two monthly declines and was fairly broad-based across the eurozone. The Iberian economies of Spain and Portugal did particularly well, posting gains of 1.9 percent and 3.1 percent, respectively.

"The outlook is starting to brighten a little for eurozone consumers," said James Howat, European economist at Capital Economics.

Despite the signs of improvement, the eurozone continues to face huge problems and most economists think it will remain the laggard of the world economy.

Among the challenges will be to get unemployment down and prevent deflation, a sustained fall in prices that can encourage consumers to put off purchases in the hope of getting better bargains further down the line.

Photograph: Eurostat

Wednesday's figures highlighted disparities across the eurozone, which had 17 members in November the bloc grew to 18 members following Latvia's adoption of Europe's single currency at the start of the year. While countries like Germany and Austria have unemployment rates around 5 percent, those at the forefront of Europe's debt crisis, such as Greece and Spain, have over one in four of their people out of work. The situation among the young there is even worse, though Greece appears to be showing some improvement on that front, with 54.8 percent of those aged 15-24 out of work at last count in September, compared with 57.7 percent the previous month. Policymakers are hoping the eurozone's return to economic growth may get unemployment down. So far, the eurozone's recovery from its longest-ever though not deepest recession has been paltry but most economists are predicting a modest pick up this year, with even Greece emerging from a six-year depression that has seen its overall economic output shrink by over a fifth.

Because it takes a few months for changes in economic growth to affect the labor market, and as many governments continue to make spending cuts to get public finances into shape, most economists think it will be some time before there's a real drop in unemployment. "It is good news that labor shedding has receded so that the number of unemployed is no longer rising, or at least not by much," said Marie Diron, a senior economist adviser at EY, formerly Ernst & Young. "But we think that it will be a long while before we see a fall in unemployment." AP