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Posts tagged with: "LRHUTTTTDEM156S"

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Unemployment rates by country during COVID-19

Considering differences in pandemic-related policies

In a previous post, we mapped unemployment claims for U.S. states during the COVID-19 pandemic. Today, we compare the unemployment rates of seven high-income countries.

The graph shows monthly, seasonally adjusted unemployment rates for Japan, Germany, U.K., U.S., Canada, France, and Italy. These rates are harmonized—that is, the same definition of unemployment is used for all these countries.

U.S. unemployment spiked from 3.5% in February 2020 to 14.7% in April. (It spiked similarly in Canada, from 5.6% to 13%.) But unemployment did not rise significantly in other countries. What explains this difference?

Countries that reduced the spread of COVID-19 early on have had less severe economic contractions, which may help explain the low unemployment rates in Japan and Germany. However, this doesn’t explain the overall trend of higher unemployment in the U.S. when the U.K., France, and Italy have also been heavily impacted by the pandemic.

In Europe and Japan, the government’s approach to unemployment during COVID-19 has focused on maintaining employer-employee relationships. Significant subsidies have been provided for employers to maintain their workforces, leading to fewer applications for unemployment insurance benefits. In the U.S., policy has focused on providing unemployment benefits to workers that have already been laid off or furloughed. It remains to be seen which approach will be more effective in supporting labor markets.

How this graph was created: From FRED’s main page, browse data by “Source.” Click on “Organization for Economic Co-operation and Development” and then “Main Economic Indicators.” On the left, filter by “Unemployment,” “Harmonized,” and “Seasonally Adjusted.” Select the monthly unemployment rates for Germany, Japan, the United States, Italy, France, Canada, and the United Kingdom. Select “Add to Graph” at the top of the page. From the “Edit Graph” panel, use the “Format” tab to change colors/line markers as desired.

Suggested by Iris Arbogast and Yi Wen.

View on FRED, series used in this post: LRHUTTTTCAM156S, LRHUTTTTDEM156S, LRHUTTTTFRM156S, LRHUTTTTGBM156S, LRHUTTTTITM156S, LRHUTTTTJPM156S, LRHUTTTTUSM156S

The Great Recession’s economic sneezes, colds, and hiccups

An international comparison of unemployment rates

The Great Recession (December 2007—June 2009 in the U.S.) impacted unemployment rates very differently across countries. The graph above shows four different countries with noticeable patterns. In each country, unemployment increased during the course of the recession, with the U.S. recession marked by a gray bar. In the U.S. and Japan, the increase was from a relatively low level (below 5%); in France and Germany, however, the unemployment rate at the start of the recession was higher (above 7.5%).

In the U.S., the unemployment rate more than doubled, while in Japan the increase was relatively moderate. In the aftermath of the recession, both these countries experienced long transitions back to their pre-recession level of unemployment: Japan waited until 2013 and the U.S. until 2015. In France, the unemployment rate behaved very differently: It increased by more than 2 percentage points during the recession, but has not exhibited any sign of convergence back to its pre-recession level since then. In fact, it increased even more in 2012 and 2013. Germany presents yet another pattern: After increasing slightly during the recession, the unemployment rate continued on a downward trend that had started back in 2005. The German unemployment rate has now reached a level that’s well below its pre-recession level and is comparable to that of Japan and the U.S.

How this graph was created: In FRED, search for and select “Harmonized Unemployment Rate: Total: All Persons for United States.” From the “Edit Graph” section, select the “Add Line” tab, add “Harmonized Unemployment Rate: Total: All Persons for Japan.” Repeat for “Harmonized Unemployment Rate: Total: All Persons for France” and “Harmonized Unemployment Rate: Total: All Persons for Germany.”

Suggested by Guillaume Vandenbroucke and Heting Zhu.

View on FRED, series used in this post: LRHUTTTTDEM156S, LRHUTTTTFRM156S, LRHUTTTTJPM156S, LRHUTTTTUSQ156S

Not all recessions are created equal

Differences in European unemployment rates

The previous recession was a worldwide phenomenon. It originated with a financial crisis in the United States that resonated in other countries, in particular Europe. The graph above shows the unemployment rate for the U.S. and a few European countries. It is taken from the OECD’s Main Economic Indicators, which goes through the trouble of trying to harmonize the definitions across countries, thus making them comparable. What is striking is how varied the experience has been. The gray area represents the period of the U.S. recession. It is remarkable that Germany’s unemployment rate actually was going down through much of this period. In contrast, unemployment shot up in Spain and, to a lesser degree, in Italy. And the U.K., arguably with the strongest financial ties to the U.S., experienced a relatively minor increase in unemployment. How can such varied experiences be explained? For one, the financial crisis was not the only economic event happening across those countries. Second, the labor market institutions and traditions differ a lot as well. Spain in particular is a poster child of rigid labor laws, and Germany was still in the transitional phase of labor market reforms.

How this graph was created: Search for “harmonized unemployment rate total,” then use the tags in the side bar to limit choices to frequency “monthly” and “seasonally adjusted.” Check the countries you want to display and click on “Add to Graph.” Finally, let the sample period start in 2002.

Suggested by Christian Zimmermann.

View on FRED, series used in this post: LRHUTTTTDEM156S, LRHUTTTTESM156S, LRHUTTTTGBM156S, LRHUTTTTITM156S, LRHUTTTTUSM156S


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