On Tuesday, the Organisation for Economic Co-operation and Development (OECD) released the harmonized unemployment rates for December 2011, showing an unemployment rate across the OECD area of
8.2%; the same rate as the previous month. Similarly, the rate within the Euro area also remained unchanged at 10.4%, marking a continued high since the start of the economic crisis in 2008. These averages mask a great deal of cross-national variation, however, with some countries having extraordinarily high unemployment – i.e., Spain (22.9%), Ireland (14.5%), and Portugal (13.6%)—and others having relatively low unemployment—i.e., Austria (4.1%), the Netherlands (4.9%), and Luxembourg (5.2%).
As we noted in a previous article, unemployment in the U.S. fell to 8.3% in January 2012, marking the fifth consecutive month that the rate has declined. To put this trend in perspective, we wanted to look at the unemployment trends in other OECD countries. The following chart shows unemployment rates in selected OECD countries from September 2011 through January 2012 (note: January 2012 rates were only available for Canada and the U.S.):
Although there’s a lot going on in this chart, one trend is unmistakable: whereas most of the countries in the sample have seen a steady increase in unemployment rates over this period, only the U.S. and Germany have seen consistent declines in unemployment over this period. Furthermore, the rate in the U.S. is quickly approaching the OECD average, and is already significantly below that of the European Union.
In short, while the U.S. economy still finds itself in a big hole, the recent trends are very optimistic; something that cannot be said for very many of the other OECD member states.