These are stories Report on Business is following Tuesday, Sept. 30, 2014.
These are dark days for continental Europe.
Unemployment remains painfully high, while inflation is edging down ever closer to zero, according to the latest statistics today, adding more pressure to central banks poised to meet on Thursday.
And digging beneath today's headline numbers shows something even more troubling: Several countries face the prospect of a lost generation as unemployment among young people surges.
By the numbers:
- Unemployment among the 18 nations that make up the troubled euro zone held at 11.5 per cent in August, according to the statistics agency Eurostat. In the wider European Union, the jobless rate dipped to 10.1 per cent from 10.2 per cent.
- Almost 25 million people can’t find work in the EU, more than 18 million of them in the euro zone.
- Greece and Spain continue to have the highest unemployment in the region, at 27 per cent and 24.4 per cent, respectively.
- Austria and Germany, at 4.7 per cent and 4.9 per cent, enjoy the lowest.
- Among young people, unemployment now stands just slightly below that of July’s level, at 21.6 per cent in the EU and 23.3 per cent in the euro zone.
- More than half the youth work force in Greece and Spain is jobless. And in Italy, youth unemployment is now running at more than 44 per cent.
- Even in the stronger nations of Germany, Austria and the Netherlands, unemployment is still high.
At the same time, deflation fears are being fanned by consistently low inflation, which Eurostat pegged at 0.3 per cent this month, down from August's 0.4 per cent.
Just yesterday, as The Globe and Mail's David Parkinson reports, a major new report warned of the danger of slow economic growth and low inflation across the globe.
Today's numbers add even more pressure on chief Mario Draghi's European Central Bank, which meets Thursday after having cut interest rates twice now.
"The euro came in for a bashing again this morning, as inflation pushed further to the downside, increasing the validity of calls for the introduction of a fully blown asset purchase scheme by the ECB," said research analyst Joshua Mahony of Alpari in London.
"Mario Draghi has been fighting against the plummeting rate of CPI, which has been falling since the beginning of 2012 when it peaked out at 3 per cent," he added.
"Today's fall to 0.3 per cent was thus far from unexpected, however the continuation of this downward trend in prices makes for worrying reading and proves to the markets that all the measures introduced so far have been completely ineffective at bringing about price stability or higher growth within the region."
Mr. Mahony also pointed to today's separate reading from powerhouse Germany, where the jobless rate held steady but the number of unemployed rose for the month in a row.
"Over all, this continued weakness in Germany, accompanied by an incessantly falling inflation rate, means that Mario Draghi is being pushed into a corner to find the solution, and fast," he said.
- David Parkinson: Are we on the verge of another financial crisis?
- Euro zone inflation slows as ECB prepares for policy meeting
- Japan's economy takes another hit as output, spending slump
The world of electronic payments is changing even faster, with the announcement today that eBay Inc. plans to spin off PayPal next year.
This follows Apple Inc.'s launch of an electronic payment system, and pressure from activist Carl Icahn, who has pressured eBay to break the company into two.
"A thorough strategic review with our board shows that keeping eBay and PayPal together beyond 2015 clearly becomes less advantageous to each business strategically and competitively," chief executive officer John Donahoe said in a statement.
"The industry landscape is changing, and each business faces different competitive opportunities and challenges."
Shares of eBay surged in the premarket hours, up by more than 11 per cent.
Auto makers in focus
Ford Motor Co. shares are flat-lining in premarket action so far this morning, after yesterday's plunge amid a profit warning, and as investors eye the American auto industry.
Ford stock was up just 0.2 per cent with about two hours to go before the New York open.
Yesterday, Ford shares tumbled as it projected at an investor conference that its pretax profit this year would come in at about $6-billion (U.S.), compared its earlier predictions of between $7-billion and $8-billion.
Ford, of course, was alone among the Detroit auto makers in escaping bankruptcy protection during the crisis.
At the same time, according to the Wall Street Journal, General Motors Co. chief executive officer Mary Barra is expected tomorrow to unveil the auto maker's strategy for the next few years.
Ms. Barra, whose company has been in the eye of a safety storm, told the news organization she would disclose her timelines.