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Unemployment Rate

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By NICHOLAS WINNING and ILONA BILLINGTONLONDON -- The unemployment rate in the 16 countries that use the euro rose more than expected and to the highest level for a decade in May as more companies laid off staff in a bid to survive the deepest recession since World War II, official data showed Thursday.The euro-zone jobless rate rose to 9.5% in May from an upwardly revised 9.3% in April, the highest level since May 1999 and 2.1 percentage points higher than in May last year, the European Union's Eurostat statistics agency said.The increase was stronger than the market consensus estimate of a rise to 9.4% from a Dow Jones Newswires survey of economists last week.

April's jobless rate was also revised up from 9.2% reported last month.Eurostat said 273,000 people joined unemployment queues across the euro zone in May, bringing the total number of jobless to 15 million, more than the entire populations of Austria and Ireland combined.The rise in the number of people out of work darkens the outlook for consumer spending and suggests it may take longer for the region to recover from recession.At the current rate of increase, the jobless rate looks increasingly likely to surpass the European Commission's upwardly revised euro-zone unemployment forecast in the next few months.

In May the commission raised its forecast for unemployment at the end of the year to 9.9% from 9.3% and said it expected it to rise even further to 11.5% in 2010.Euro-zone producer prices fell for a tenth consecutive month in May, while the annual measure recorded a fresh record drop, data from Eurostat showed.Producer prices fell 0.2% from the previous month in May and also declined 5.8% from a year earlier.

That was the largest annual decline since comparable records began in January 1982, Eurostat said.The decline in factory gate prices was a little more severe than expected, with economists surveyed by Dow Jones Newswires last week forecasting a flat monthly outcome and a 5.6% yearly fall.Eurostat also reported that energy prices rose 0.2% on a monthly basis but fell 14% from a year earlier.

That was the steepest drop since a 14.7% annual fall in December 1986.

Records for this measure began in January 1986, Eurostat said.Eurostat said Spain, where a slump in construction led to record economic contraction in the first quarter, posted the highest unemployment rate in the EU at 18.7%.

The lowest rates were recorded in the Netherlands with 3.2%, followed by Austria at 4.3%, it said.Write to Nicholas Winning at [email protected] and Ilona Billington at [email protected]

http://online.wsj.com/article/SB124652525124484955.html
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