US and European jobless rates

Filed under Employment Rates, Trades and Culture

Here’s a look at some unemployment rates from around the US and the rest of the world. On the surface of things, Europe is recording some record lows in unemployment. Around the US, though, there are rumblings and grumblings about “swelling unemployment” (not everywhere, of course).

In Columbia, South Carolina, they talk about an unemployment rate that is going to be stuck at its current high rates well into next year at a rate well above the national average. The unemployment rate in Columbia was 5.8% in October. South Carolina’s home page, thestate.com headlines an economic slowdown: “S.C. economy to put on brakes.” Meanwhile in Waynesboro, VA, the unemployment rate has “swelled to 3.8%.” You know where we’re going with this, right? Just hang on.

Finfacts.com is reporting that “The Eurozone (EA13) seasonally-adjusted unemployment rate hit a record low of 7.2% in October 2007.” Meanwhile, European Business Guide is reporting that The EU27 unemployment rate was 7.0% in October 2007. And Scott Jagow at American Public Media’s Marketplace summarises: “The jobless rate is the lowest its been since the modern E.U. was formed in 1993.” Still, though, with jobless rates that high, Megan Williams reports that Europeans are not all that happy. She cites rising inflation and other factors. Mark Perry, a professor at the University of Michigan notes:

In the U.S., a 6.0% unemployment rate in 2003 was condemned and criticized as a “jobless recovery” during the economic expansion that started at the end of 2001.
Bottom Line: In terms of unemployment rates, the U.S. economy, even during its worst years of recessionary labor market conditions like 2001-2003, is still better than the European economy during its best years.

There is a lot of rumbling in post replies to Perry’s blog that the means of measurement are so different that comparisons are irrelevant. One poster cites a comparison of the US BLS that quotes the American employment-population ratio as 62.7 percent while the EU’s employment-population ratio is 64.4 percent.

Where does all that leave us? Perry is obviously eagerly willing to trumpet the US economy and subtly (or not-so-subtly) bash Europe. As long as the means of measurement remain the same in each country or continent then comparisons year over year seem relevant. Is any area very badly off? Not likely or not at the moment certainly.

In any case, you should be sure to think carefully about broad unemployment statistics. As far as comparisons from one month to another or from one industry to another, it’s safe to assume that that statistics are reported according to consistent standards.