Economy in Brief

The unemployment rate in the European Monetary Union in November 2023 is tied for its all-time low, a low reached in June 2023. The percentile standing of the unemployment rate puts it in its 0.3 percentile, lower than any of the EMU countries in the table. Within the Monetary Union, Belgium's unemployment rate stands at its 10.8 percentile, the same as Germany’s. In France the unemployment rate has a 6.4 percentile standing, and the Dutch unemployment rate has a 9.3 percentile standing. The United States where the unemployment rate is within a stone’s throw of a 50-year low is at its 8.4-percentile. Japan, that chronically runs very low unemployment rates, has its rate at its 16.5 percentile.

Historically low rates of unemployment- The only entries in the table with unemployment rate above their historic median are the United Kingdom where the claimant rate is at its 61.6 percentile. The European Monetary Union member country that has an above-median unemployment rate is Luxembourg, a very small country with the concentration of jobs in the services sector and in the financial sector. Its unemployment rate has an 81.7 percentile standing, although it has the sixth lowest reported unemployment rate among the twelve countries in the table. Traditionally, Luxembourg has run a relative low rate of unemployment, that accounts for the relatively high standing of a union-wide moderate unemployment rate.

The EMU rate falls on balance over 12-months- The unemployment rate for the European Monetary Union in November has fallen over 12 months by 0.3 percentage points while looking at the member countries on the table only five of twelve countries in the table have seen their own unemployment rates fall over 12 months. This EMU-wide rate falls because countries with falling unemployment rates generally had relatively sizable drops over 12 months while the large countries reporting in the table such as Germany and France and moderately sized Portugal, each had an unemployment rate increase of just 0.1 percentage point over 12 months.

Still, rate declines appear to less common- However, looking at monthly patterns, we see four countries with unemployment rates declining in November, only three with the unemployment rates declining in October, and only one with employment rate declining in September. Unemployment rates were unchanged in November in four countries, in October six countries had unemployment rates unchanged from their level in September, and in September six countries had unemployment rate levels unchanged from their level in August. The declines in the unemployment rate are becoming rarer in the monetary union and that's not surprising when looking at the historic rankings and the current low levels of unemployment rates.

Paradox of the lower EMU standing than for any member country- The unemployment rate and the monetary union has a much lower ranking than for individual member countries because it's the coincidence of having low rates and all the countries. That synchronization is responsible for making the EMU overall unemployment rate rank so low. Having only the smallest country listed in the table with an unemployment rate above its median clearly underscores how widespread low unemployment has become across the monetary union.

The EU Commission indexes for the European Monetary Union's (EMU) performance in December show an overall index improving to 96.4 from 94 in November. This continues a string of improvements that has been underway. The improvements run across most sectors although there's more flattening than improving going on – still, that's good news. Compared to September, for example, the overall index is stronger by nearly three points, the industrial index is unchanged, consumer confidence is better by nearly three points, the retail sector is unchanged, and construction is improved by two points, and the services sector is better by three points. These are small changes over a period of three months; still, they represent stability or improvement across the board.

The country level data have been improving as well. In December, only five of the seventeen early reporting countries show deceleration month-to-month. This is the same number as deteriorated for this group in November. However, in October eleven of these seventeen countries showed deterioration.

The rank standings for the industries are dominated by weakness in the industrial sector and consumer confidence. The industrial sector has a 31.2 percentile standing, consumer confidence has a 21.9 percentile standing and these have strong weights to cause the overall index for the EMU to have only a 34.8 percentile standing. This is despite retailing having a 59.4 percentile standing, construction a 74.3 percentile standing, and the services sector at a 55.2 percentile standing. Three of the EMU sector indexes have standings above their medians (rankings above 50%) while two have standings that are weaker than their medians.

Looking at the same statistics for countries, there are only four country standings above their 50th percentiles. All of those are small countries: Greece has a 61.2 percentile standing, Cyprus has a 62.7 percentile standing, Malta has a 60.1 percentile outstanding, and Lithuania has a 56.6 percentile standing. Germany, the largest economy in the monetary union, ranks 14th among the seventeen early-reporting countries, France ranks seventh, Italy 6th, and Spain 5th. Germany and France tend to be two of the strongest economies in the monetary union; however, among the four largest countries they have the weakest percentile standings, with Germany logging a percentile standing at 21% and France at about 35%.