Greek Q3 jobless rate hits 10-year high, recession bites

Greece's unemployment hit a 10-year high in the third quarter with economists expecting more pain as austerity policies to shore up public finances dampen economic activity.
The jobless rate rose to 12.4% in the three months to September, from 11.8% in the second quarter, as gross domestic product (GDP) shrank at an annual pace of 4.6%, statistics service data showed.
Investors are keeping a close eye on public reaction to increasing unemployment as well as wage cuts agreed as part of a 110 bln euro EU-IMF bailout deal, as protests and social unrest may upset Greece's fiscal consolidation drive.
Greek protesters clashed with police and set fire to cars and a hotel in central Athens on Wednesday as tens of thousands marched against austerity measures.
"The intensifying recession is hurting the labour market," said National Bank economist Nikos Magginas. "Construction and manufacturing are contracting at an accelerated pace, while the wholesale and retail trade sectors look comparatively more resilient as they make use of more flexible labour practices."
He saw the jobless rate worsening to above 13% in the last quarter as domestic demand weakens further.
Greece's jobless rate was 2.3 percentage points higher than the average in the 16 countries sharing the euro in September but lower than Spain's 19.8% unemployment.
The statistics service said the number officially out of work was 621,938, with unemployment a much higher 24.2% in the 15 to 29 age group.
Greece's economy, which makes up about 2.5% of the euro zone, is in recession for a second straight year with GDP expected to contract by 4.2% and by another 3.0% in 2011.