The eurozone’s unemployment rate rose slightly in July to 7.9 percent, up from 7.2 percent in March, which was the lowest on record, according to data published on Tuesday.
Though government programs protected the jobs of a substantial portion of Europe’s work force during the height of the pandemic, unemployment is still rising. In July, 12.8 million people were unemployed, 500,000 more than a year ago. Several countries, including France and Germany, have said recently that they would extend some of the wage-protection benefits as large employers continued to announce the layoffs of thousands of workers.
The widespread use of furlough programs might also conceal the true impact of the pandemic on Europe’s labor market in the official data, which only records people who are unemployed and currently looking for new work.
The gradual increase in unemployment is difficult to interpret, said Claus Vistesen, an economist at Pantheon Macroeconomics, in a note. “It is just as likely that unemployment rose because people returned to the labor market — and were classified as job seekers — as it is that previously employed or furloughed workers have lost their job,” Mr. Vistesen said.
What can be seen is that unemployment is higher for young people and women. The eurozone unemployment rate for those under 25 was 17.3 percent, the highest since early 2018. For women, the unemployment rate rose to 8.3 percent in July, from 8 percent the previous month. For men, the rate rose to 7.6 percent, from 7.5 percent in June.
Of the countries that have reported so far, Spain, which is grappling with a resurgence in coronavirus cases, had the highest unemployment rate of 15.8 percent.
Separate data showed the annual rate of inflation turned negative in the eurozone — those nations that use the euro as their currency — for the first time since 2016.