Unemployment Hits 11.1% in the Eurozone, 5.5% in the US
According to the July 31 Eurostat release, the unemployment rate in the Eurozone was at 11.1% in June 2015. It held steady from May’s 11.1%.
EWG was down 0.57%, as Germany’s inflation and unemployment rate held steady despite the ECB’s (European Central Bank) monetary easing measures.
Greece just recorded its 28th month of deflation. American companies such as Pfizer (PFE), PepsiCo (PEP), and Xerox (XRX) operate and provide employment in Greece.
Wage growth, the spotlight of the report, experienced a 2.7% rise in April. Wage growth came in at 2.3% in March, and expected growth for April had been 2.1%.
Greece has only managed to postpone its fate. The probability of it defaulting on its debt still remains. It’s the most indebted country in Europe.
According to an April 30 Eurostat release, the unemployment rate in the Eurozone was at 11.3% in March 2015. The rate was in line with market expectations.
Another example that highlights the heterogeneity within the European labor markets is Spain versus Ireland. Spain and Ireland both experienced large employment destruction in the construction sector after the Lehman shock. However, they fared differently during the sovereign debt crisis.
The difference in unemployment rates between the countries is connected to structural developments in the labor markets. The heterogeneity is a result of different initial conditions like employment’s varying sectoral compositions. Also, unemployment rates have historically been higher in some Eurozone countries than others.
Structural unemployment occurs for numerous reasons. It’s usually due to a lack of requisite job skills among workers. It can also be caused by a lack of workers’ willingness to work because of existing low wage levels.
Cyclical unemployment is a product of business cycles. A business cycle refers to periods of expansion or recession. In Europe’s case, weak gross domestic product (or GDP) data across the 18-nation economy continues to reflect the Eurozone’s weakness.
Past inflation and unemployment determine current inflation. Inflation increases when unemployment is below the normal unemployment rate—when the economy runs at full capacity. Inflation falls when unemployment is above normal.
The Eurozone’s unemployment is at 11.5%. It was the focus of Draghi’s speech at the 37th annual Jackson Hole Economic Policy Symposium on August 22. Draghi used the opportunity to discuss the Eurozone’s high unemployment. He provided an overview of how the ECB currently views the unemployment situation.
The Jackson Hole Economic Policy Symposium is an annual conference sponsored by the Federal Reserve Bank of Kansas City. It began in 1978. To date, there have been 37 conferences. The conference looks at future emerging issues and trends.