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Unemployment Rate Started to Decline Already in May
The unemployment rate has been declining in Europe for years now, but with the coronavirus spreading and the lock-downs, the unemployment rate jumped higher in many countries across the globe. In the US unemployment rate jumped above 15%, heading towards 20% in March and April.
Although, it didn’t move much in Europe in April. It was expected to jump higher that month but it didn’t/ The same situation was for May, with unemployment expected at 7.7%, but it came at 7.4%. Below is the unemployment and the PPI reports.
May Unemployment Report
- May unemployment rate 7.4% vs 7.7% expected
- April unemployment rate 7.3%
The jobless rate comes in lower-than-expected once again and is only a touch higher relative to April. Once again, I’d want to caution against looking too much into this as the figures are a bit skewed by government furlough programs and also the fact that the ILO standard definition of “unemployment” isn’t exactly the best in a time like this:
A person aged between 15 to 74 years who are without work, are available to start work within the next two weeks and have actively sought employment at some time during the previous four weeks.
Latest PPI Report Released by Eurostat – 2 July 2020
- May PPI MoM -0.6% vs -0.4% expected
- April PPI MoM -2.0%
- PPI YoY -5.0% vs -4.5% expected
- April PPI YoY -4.5%
Producer prices sink further in May in another sign of waning inflation pressures in the region, with the annual reading now at its lowest since October 2009. Although this is a lagging and proxy indicator of inflation, it isn’t pointing towards a healthy sign as producer prices are well in deflation territory at the moment.
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