By Canadian Press

European jobless rise contained by government help

Jul 2, 2020 | 3:52 AM

FRANKFURT — The unemployment rate in the 19 countries that use the euro currency inched higher to 7.4 % in May from 7.3% in April as governments used active labour market support programs to cushion the impact of the virus outbreak on workers.

The figures released Thursday by statistics agency Eurostat show how European governments have held down the rise in unemployment through programs that pay part of workers’ salaries in return for companies not laying them off.

Another factor limiting the jobless rate is that people have dropped out of the labour force and are no longer looking for work. That could be because they are limited by confinement measures, or because they have to take care of their children who are not in school or daycare because of the lockdowns.

The government support for wages is granted because the companies are not to blame for the economic trouble – countries around the world have had to limit business, travel and public life to limit the spread of the coronavirus. The idea is to support the recovery since companies will not have to recruit and train new workers, having kept their staff.

In Germany, the eurozone’s largest economy, 6.7 million people were still on wage support programs in June. The program pays at least 60% of missing pay when workers are put on shorter hours or no hours.

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Eurostat estimated that 12.1 million people were unemployed in the countries that use the euro. The agency said that in order to fully capture the unprecedented labour market situation, its upcoming quarterly labour survey to be published July 9 would have additional information about underemployment and job market dropouts.

The U.S. jobless rate has risen to 13.3% in May from 3.5 % in February. New U.S. figures on the jobless rate and first-time unemployment claims were due out later Thursday.

David McHugh, The Associated Press