Broad unemployment in Europe, third quarter 2012. A disaster in southern Europe, rising unemployment in the UK.
Unemployment in the UK is high, compared with most neighbouring countries. And it’s rising. At least when we look at the new ‘broad unemployment’ data pioneered by the ILO and estimated and published by Eurostat, severely underreported data. There is quite some discussion about the enigma why ‘normal’ unemployment in the UK is going down, despite the economic downturn. But when we look at the right variable, the enigma largely disappears.
It seems that the UK knows an unusual large shift from ‘normal’ U-3 unemployment into categories not included in U-3 unemployment but included in U-6 unemployment, like ‘People available to work but not seeking’, ‘People seeking but not immediately available’ and ‘Underemployed part time workers’ in the UK (graph 2). When comparing unemployment of different European countries it is anyway advisable not to use the common ‘U-3’ metric but the broader ‘U-6’ metric, not just because shifts between different kinds of unemployment can complicate the picture but also because national differences between U-3 and U-6 unemployment are quite large. Look here and here. In Italy, for instance, the difference between U-3 and U-6 unemployment is unusually high, which gives a much less rosy picture of the Italian economy tha just looking at U-3 unemployment (which is way to high already). Indeed: unemployment in the Eurozone periphery is a complete and utter disaster. Can’t make anything else of it