The current turmoil on the stock markets (and we’ve just started another bout) is being induced by a weak oil price which is being taken as emblematic of weak global demand, although, clearly, it does have a direct effect on businesses related to oil production and its whole infrastructure. It is stoked by concerns that the Chinese economy is slowing, but, if official figures are to be believed, it is still enjoying extraordinary growth (6.9%). In general, cheaper oil is good news for industry and consumers alike, but investors are having none of it!
Against this backdrop, it is nice to be able to report some concrete good news – albeit fairly modest. Employment is a lagging indicator of the economic cycle with it only increasing to meet current, or realistically expected, demand for goods and services. The fact that Eurozone unemployment has fallen to a four year low is tangible news of recovery, albeit shallow. Unemployment in the 19 member state block eased from 10.5% to 10.4% at the latest reading (November 2015); a fall in the total unemployed of 49000 people leaving 16.75 million officially counted as out of work. Across the wider EU, unemployment remained unchanged with an average figure of 9%.
Unexpectedly, unemployment both within the Eurozone and the rest of the EU is very patchy ranging from over 20% in Spain and Greece still to a low of 4.5% in Germany and the Czech Republic. The data is harmonised for the EU by Eurostat, but the methodology used by different nations for their internal purposes can differ; for instance, according to the German protocol for calculating unemployment their reading is higher than the Eurostat figure, coming in at 6.3%.
Youth unemployment remains disproportionately high with 22% of workers under the age of 25 idle, however, this too shows encouraging signs as it has fallen from 23% since last determined.