European unemployment estimated to rise to 9% by 2010

The organization for economic cooperation and development reported this week that unemployment in the euro area is set to rise from 7.4 this year to 9% in 2010. This is because the European, U.S. and Japanese economies will shrink even further next year due to the economic crisis.

“Consumers have become far more uncertain about keeping their jobs in the past months, they may have lost money in the stock market and in some European countries housing prices are declining, which isn’t exactly a stimulus for consumer spending,” said Martin van Vliet, an economist at ING Groep NV. “The economic climate makes people step up their precautionary savings.”

The measure of sales in the euro region is still below the 50 limit which indicates a contraction and this figure had further declined from 44 to 41 in October. This decrease was the biggest in the last five years history of the index. European sales have fallen even further because the recession eroded consumer confidence and spending.

We have seen that the economy has been shrinking for months now but when will this stop? Is the upturn anywhere near? I seriously hope so.