New report paints bleak picture of EU unemployment, which has risen sharply in 2020

Unemployment in the EU has risen sharply over the last year due to the effects of the coronavirus pandemic, according to Eurostat.

The unemployment rate for the bloc was at 7.6% in October 2020, up 1% compared to October 2019.

Eurostat estimates that 16.2 million in the EU27 were unemployed in October 2020 — an increase of around 2.2 million compared to 2019, but down 91,000 on September’s total.

When considering the working population in the 19 eurozone countries, the seasonally-adjusted rate of unemployment in October 2020 stood at 8.4% compared to 7.4% compared at the same time the previous year.

Despite this gloomy projection, unemployment in the area has actually fallen slightly since September 2020 when it stood at 8.5%, the European statistics office announced on Wednesday.

Despite the unemployment rate for young people under 25 in the EU being far higher than the average for all citizens in October 2020 (17.5%), the change since 2019 is far less marked, increasing by 0.1% or 404,000 people to 3.115 million.

Eurostat has revised upwards its figures for recent months: The unemployment rate was initially announced at 7.9% in July, 8.1% in August and 8.3% in September but according to the latest available data, it reached 8.7% in July, 8.6% in August and 8.5% in September.

This changed data showed a decrease in EU unemployment during the summer, which is consistent with the evolution of the Gross Domestic Product (GDP) — this reached an unprecedented growth rate during this period, after the historic recession in the spring.

The return of national lockdowns during the autumn in Europe has raised fears of further economic deterioration and a further rise in unemployment at the end of the year.

But some experts remain optimistic that unemployment will not increase further in 2021 due to a combination of government support plans and an expected increase in activity linked to the arrival of COVID-19 vaccines.

The unemployment rate is an important indicator with both social and economic dimensions, Eurostat said, pointing out that rising unemployment results in a loss of income for individuals, increased pressure with respect to government spending on social benefits and a reduction in tax revenue.

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