Cross-posted from FTAlphaville:
At a passing glance, it appears that on both sides of the Atlantic the labour market is, if not exactly thriving, doing far better than we might have expected. In the US, the headline jobless rate has swiftly fallen back from 15 per cent to 8.4 per cent. Meanwhile in the eurozone the picture looks even brighter: the unemployment figure has barely moved up at all — the latest reading, out Thursday, was 8.1 per cent. That’s actually below its historical average. Does that mean all is well? No, it certainly does not.
As Leo Hindery, Jr, a member of the Council on Foreign Relations, put it recently in this piece for us, looking at headline rates makes for a misleading reading of what’s actually happening on the ground. The reason being that many of those who initially lost their jobs in the US have now fallen out of the headline measure due to the Bureau of Labour Statistics labelling them either re-employed in part-time jobs or ineligible for work. That’s because circumstances related to the crisis have meant they’re no longer searching for a job. This newfound ineligibility could also have affected unemployed workers who were looking for a job before the crisis struck but no longer can. Via Hindery, Jr:
