Archive for April, 2013

IT IS a car crash of a data release. One simply can’t look away. Hard to know precisely which part of the euro area’s latest unemploymend report is the most grimly compelling. The overall rate, at 12.1%? In the spring of 2010 unemployment rates in America and the euro zone were effectively the same at about 10%. There is now a gap of 4.5 percentage points. Total unemployment? In the first three years of the downturn America did far worse than the euro area, adding some 7.5m workers to the unemployment rolls to Europe’s 4.7m. Since then total unemployment in the euro area has risen by another 3.2m while America reduced the ranks of the jobless by 3.5m. The euro area now has some 19.2m unemployed workers.Individual country numbers inspire their own brand of horror. Greek joblessness topped 27% in January (the most recent month for which data there are available), while Spanish employment has risen to 26.7%. Joblessness in France rose by slightly more in the year to March than it did in Italy. And did you know that Dutch unemployment rose by 1.4 percentage points over the past year? German unemployment, of course, has held steady at 5.4% since last summer.It is the youth figures that are most remarkable, however: 59.1% of those under 25 are unemployed in Greece, 55.9% in Spain, 38.4% in Italy, 38.3% in Portugal, 26.5% in France—3.6m youths in all.There is blame to go …

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COMMODITY prices are falling fast on fears that Chinese growth is slowing and that economic recovery elsewhere has stalled. See chart here. 

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UK Only Article: 
standard article


Generation jobless

Fly Title: 

Work and the young


The number of young people out of work globally is nearly as big as the population of the United States

Main image: 


“YOUNG people ought not to be idle. It is very bad for them,” said Margaret Thatcher in 1984. She was right: there are few worse things that society can do to its young than to leave them in limbo. Those who start their careers on the dole are more likely to have lower wages and more spells of joblessness later in life, because they lose out on the chance to acquire skills and self-confidence in their formative years.
Yet more young people are idle than ever (see article). OECD figures suggest that 26m 15- to 24-year-olds in developed countries are not in employment, education or training; the number of young people without a job has risen by 30% since 2007. The International Labour Organisation reports that 75m young people globally are looking for a job. World …

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THE IMF’s recently published a thought-provoking analysis on changes in the apparent relationship between inflation and unemployment. I posted some thoughts on the work here. (It was also the subject of a Free exchange column.) I’ve since reflected more on the work, and on some related writing by Nick Rowe. And on this chart:

The chart shows four different gauges of inflation expectations. Three are mostly market driven. The University of Michigan measure comes from survey data; it is typically higher than other measures and responds more to commodity price swings (or really, oil price swings). Expectations swoon in late 2008 as everyone worries that the world is ending. Since that time there have been wiggles—the mid-2010 dip prompted the launch of QE2—but all of these series have been surprisingly stable, mostly flat, and mostly within a stone’s throw of 2%.The IMF notes the stability of inflation expectations and reckons that it is attributable to central bank credibility; from the early 1980s central banks convinced the public (with the help of a honking recession or two) that inflation in future would be generally low and stable. Inflation expectations became so well anchored that not even the worst few months of economic performance since the 1930s could produce deflation. I’ve been thinking about whether that narrative seems right.In September of …

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BRITAIN’S economy may be heading for a triple-dip recession, but for carmakers like Jaguar and Rolls-Royce the decline has long been over

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TODAY’S recommended economics writing:• Replicating Reinhart-Rogoff (Mike Konczal)• The world’s three speed economic recovery (iMFdirect)• Are Germans really poorer than Spaniards, Italians and Greeks? (Vox)• China’s Pettis moment (Alphaville)• Precedents for deficit spending in a downturn (Brad DeLong)• Why is the global recovery so weak? (Prakash Loungani)

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TODAY’S recommended economics writing:• Macroeconomic overview (Brad DeLong)• In the inland empire, an industrial real estate boom (Los Angeles Times)• Labor force participation and monetary policy in the wake of the Great Recession (Christopher Erceg and Andrew Levin)• Recession slows, but doesn’t change, migration trends (Real Time Economics)

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