MONEY
Jobs
Unemployment rising in down economy
Last Updated: Friday, June 5, 2009 | 3:06 PM ET
CBC News
You might forgive the average Canadian or American if they don't see the economic turnaround that analysts do in the latest blizzard of statistics.
The IMF predicts there will be even more job seekers at work fairs by 2010. (Muriel Draaisma/CBC) While economists expound the importance of the Institute for Supply Management's monthly survey of purchasing managers or the Conference Board's measure of chief executive confidence, the one number that perhaps best reflects the economic fortunes of individuals in both countries— the unemployment rate — just keeps rising.
In the most recent figures, the unemployment rate in the United States blasted through the nine per cent mark, reaching 9.4 per cent in May.
Equally dismally in Canada, unemployment hit 8.4 per cent in the same month — up 2.3 percentage points, or 38 per cent higher, versus the jobless gauge of 6.1 per cent in May 2008.
Economy watchers, who note that the job market often trails the overall economy, said such bad news will come fast and furious for the next bit."It's hardly shocking that Canadian employment has retreated again — the jobs shakeout still has a ways to go," said Douglas Porter, an economist with BMO Capital Markets Economics, in a note parsing Canada's employment figures.
Most countries have experienced an explosion in the percentage and the number of people who cannot find work. And much like BMO's Porter, other economists do not see much positive news in the Canadian or U.S. jobs markets for the next several months.
"The May employment report shows that while the pace of losses may be slowing, the U.S. labour market is still hemorrhaging jobs," wrote Heidi Shierholz for Washington-based economic think tank the Economic Policy Institute.
Dark forest
The International Monetary Fund, in its April global outlook, estimated that unemployment in the major advanced economies will burst through nine per cent by 2010 at 9.3 per cent.
If correct, the forecast means the jobless rate in the industrialized world would be 57 per cent higher, compared with the 5.9 per cent registered in 2008.
Even the newly industrialized Asian economies — countries hurt by the North American slowdown but not as damaged by the global credit crunch — will see unemployment spike by 2010. The IMF predicts that these countries will have a jobless rate of 4.9 per cent in 2010, up from 3.5 per cent two years earlier.
Some countries still enjoy relatively low levels of unemployment, although jobless rates everywhere will rise, the IMF predicts.
Korea, for instance, is expected to see its jobless rate inch up to 3.8 per cent by the end of 2009 and will experience an actual decline in unemployment in 2010, according to the IMF's latest forecast.
A number of northern European countries, such as Norway, might escape the worst of the jobs carnage.
By contrast, the IMF thinks that the United States, Germany, France, Italy and Spain will see double-digit unemployment by the end of 2010. Worse, the two countries comprising the Iberian peninsula — Spain and Portugal — will average nearly 18 per cent unemployment between them.
In addition, Ireland, once lauded as the Celtic Tiger for its 1990s economic growth, will see unemployment rise well above 10 per cent in 2010.
Unlike previous decades, when analysts called such economies basketcases, few economists are that smug anymore.
"This represents the deepest post-World War II recession by far," the IMF economists noted.
And, if the group's unemployment forecasts are anything to go by, things might get worse before people in most countries see any real improvement.
