Crib Notes for G7 Unemployment Rates
Unemployment rates across the G7 illustrate a broad-based labor recovery. Fantastic – now let’s get to the underlying stories.
(Note: The US is the first to release the June 2010 figures. All other unemployment rates, except for the UK, are current as of May 2010.)
Germany, France, and Italy: Germany’s labor market is ostensibly improving, as the unemployment rate continues its descent. However, don’t be fooled by these statistics: the German government is subsidizing firms to drop hours in lieu of outright layoffs.
And across the Eurozone, fiscal tightening will drive unemployment rates up; look at what fiscal austerity got Ireland.
The United States: Spencer, as usual, gives his insightful take on the US employment release: not good. The real problem is that the US private sector is sitting on an iceberg of debt; and the only way to avoid the economic pain of large-scale default is by dropping leverage via nominal income (wages) growth.
Workers have NO pricing power. How can they when the employment to population ratio dropped 0.2% to 58.5% in June? Note that 58.5% is consistent with a 1970′s-1980′s style labor force with fewer females working. Wages are going nowhere until the labor market improves substantially, and the private sector can’t do it atop the iceberg of debt. We need the government’s help there.
UK: The pace of the labor market deterioration is slowing (not evident in the unemployment rate, which dates to just March, but more evident in the claimant count). However, the unemployment rate is expected to rise as the government’s self-imposed austerity measures are put into play. Furthermore, look for weakening labor conditions to push further default amid big household leverage.
Canada: The labor market is strong as illustrated by the marked improvement in the employment figures. Expansionary policy was very likely too expansionary, and the Bank of Canada has initiated its tightening cycle. The economy is hot right now.
Japan: The labor market is weak, as most industries posted job losses in May 2010 (access Japanese labor data here).
Originally published at News N Economics and reproduced here with the author’s permission.
6 Responses to “Crib Notes for G7 Unemployment Rates”
Yuriko Chico • September 17th, 2011 at 11:14 pm
This blog is excellent. There is continually all the suitable information at the recommendations of my fingers. Thank you and maintain up the great work!
Paul Schram • September 23rd, 2011 at 2:19 pm
This weblog is wonderful. There is always all of the ideal facts at the hints of my fingers. Thank you and keep up the very good work!
Mario Pers • September 23rd, 2011 at 6:12 pm
This blog is great. There’s generally all the suitable facts in the recommendations of my fingers. Thank you and maintain up the very good work!
Eura Cleamons • September 24th, 2011 at 5:16 am
This weblog is terrific. There’s continually all of the appropriate details in the tips of my fingers. Thanks and maintain up the excellent work!
Larraine Hey • September 25th, 2011 at 9:30 pm
Thanks for taking time to write this article. It is been extremely useful. It could not have arrive at a much better time for me!
Tyron Guttierez • September 27th, 2011 at 4:51 pm
That was kind of inspiring! Totally unexpected. Now I know what I’m going to perform tomorrow 
