Unemployment rises to 16.5 percent in July

Greece’s jobless rate rose to 16.5 percent in July, its second-highest level on record, driven by EU/IMF-imposed austerity measures which have plunged the economy into its fourth consecutive year of recession.

Data from national statistics agency ELSTAT on Tuesday showed unemployment rose from 16.0 percent in June as job cuts in the wider economy outweighed a rise in seasonal tourism.

The reading — exceeded only by the 16.6 percent rate recorded in May — was sharply higher than in the same period last year, when it stood at 12 percent. The number of the unemployed grew by more than a third to about 820,000. Greek unemployment figures are not adjusted for seasonal factors.

“The pace of decline in employment in basic sectors of the economy, such as construction, retail and wholesale trade, could not be mitigated from seasonal hiring in tourism,» said Nikos Magginas, an economist with the National Bank of Greece.

Magginas said he expected the jobless rate to exceed 17.5 percent by the end of the year.

The young continued to be the hardest hit, with the jobless rate in the 15-24 category soaring to 42 percent, twice its level three years ago.

The Greek economy is seen shrinking for a fourth consecutive year, at an annual pace of 5.5 percent. The European Union and International Monetary Fund do not expect a recovery before 2013.

The average jobless rate in the 17 countries sharing the euro held steady at a seasonally adjusted 10.0 percent in July. [Reuters]