Today is not a great day for the American government, people, economy and reputation. But that doesn’t mean a good dose of schadenfreude can’t lift the gloom some.

The unemployment rate in the euro zone edged up in January to a new record, official data showed Friday, as the ailing European economy continued to weigh on the job market….

Unemployment in the 17-nation euro zone climbed to 11.9 percent in January from 11.8 percent the previous month, according to Eurostat, the statistical office of the European Union.

For the 27 nations of the Union, the jobless rate in January stood at 10.8 percent, up from 10.7 percent in December. All of the figures were seasonally adjusted….

The jobless data “suggest that wage growth is set to weaken from already low rates” and further depress consumer spending, which has already been damped by government austerity measures, Jennifer McKeown, an economist at Capital Economics in London, wrote in a research note.

Data firm Markit said its manufacturing purchasing managers’ index slid into contraction territory with a weaker-than-expected 47.9 in February from January’s 50.5. Economists had forecast the index would rise to 51.0.

Sterling sank in response to the numbers. By midafternoon in Europe, the pound was trading below the $ 1.50 level for the first time since July 2010, taking its losses against the dollar so far this year to more than 7%. Sterling also weakened against the euro….
A separate report showed consumer lending retreated in January, a reflection of Britons’ limited appetite for borrowing.

Consumer lending grew just £593 million ($ 899.2 million) in January, down from a £1.8 billion increase in December, according to Bank of England data. Mortgage lending also slumped, as it grew just £147 million in January after December’s £877 million increase.

Mortgage approvals—a good forward-looking indicator of lending and house prices—totaled just 54,719 in January from 55,632 a month earlier.

Canada’s economy expanded at a snail’s pace as 2012 ended.

Gross domestic product grew by just 0.6 per cent, on an annualized basis, in the fourth quarter of 2012, Statistics Canada said Friday, close to what was expected but a weak end to a year that saw crucial commodity prices soften, the housing market slow down, and retail spending slip.

On a monthly basis, GDP fell by 0.2 per cent in December alone. And for 2012 as a whole, growth slowed to 1.8 per cent, the smallest growth since the recession in 2009. It was also the first time in six years that Canada’s full-year numbers were lower than in the United States, National Bank Financial economist Krishen Rangasamy pointed out.

Euro Zone Unemployment Rises to Record [NYT]
Unemployment Worsens in Euro Zone [WSJ]
Grim U.K. Data Knock Sterling [WSJ]
Canada’s economy still ‘sickly’ [Globe & Mail]

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