European Unemployment Rises to Highest in Three Years in March
By Emma Vandore
Brussels, May 6 (Bloomberg) -- European unemployment rose to the highest level in more than three years in March as companies such as Alcatel SA, the world's biggest maker of broadband equipment, cut costs to return to profit.
The unemployment rate in the dozen nations sharing the euro rose to 8.7 percent, the highest since February 2000, from 8.6 percent in February, the European Union's statistics office said.
Consumers, whose spending accounts for over half the region's economy, will probably buy less as jobless lines lengthen, making it harder for growth to pick up. The economy may have contracted last quarter, the European Commission estimates.
Rising unemployment ``definitely bodes very badly for consumer spending,'' said Jacques Cailloux, an economist at Barclays Capital in London. Alcatel has slashed some 20,000 jobs to be able to break even on 3 billion euros of sales per quarter by the end of this year.
February's unemployment rate was revised from an April 1 estimate of 8.7 percent to include more recent data from Spain.
Industrial producer prices rose 0.2 percent in March, and were 2.4 percent higher than a year ago, a separate Eurostat report said. Economists had expected prices countries to rise 0.3 percent in the month.
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