September 30, 2022

Off the Charts: Seen From Greece, Great Depression Looks Good

The Greeks can only wish they had it so good.

The Greek government this week released its estimate of economic output in the fourth quarter of last year, and also published its unemployment report.

For the year as a whole, the Greek economy, measured in 2005 euros, fell to 168.5 billion euros, down 6.4 percent from the previous year. That was a little better than the 7.1 percent decline in 2011. The last time the Greek economy was smaller than in 2012 was in 2001. The cumulative decline since 2007 was 20.1 percent.

In December, the unemployment rate was 26.4 percent, and that figure actually looked a little encouraging because it was lower than the 26.6 percent reported for November. Not since May 2008, when the rate fell half a percentage point to 7.3 percent, had there been a single month when the unemployment rate was reported to have fallen.

The accompanying charts compare the changes in gross domestic product and unemployment in the United States during the five years after 1929 with the changes in Greece during the five years after 2007.

There is reason to take all the numbers with a grain of salt. The American figures were estimated after the fact, by the government for G.D.P. and by the National Bureau of Economic Research for unemployment. For G.D.P., only annual changes were estimated.

The Hellenic Statistics Authority, Greece’s compiler of official numbers, has a history of deception — the country lied to get into the euro zone — and it now cannot apply seasonal adjustments to its quarterly G.D.P. estimates. As a result, the figures shown in the charts are calculated by adding up the four quarters of each year. But European officials now vouch for the quality of Greek figures.

Perhaps the most telling difference between the course of the two economies comes in government consumption spending — basically spending that is not for investment, as in building roads or bombers. In the United States, that spending was growing even under President Herbert Hoover and helped to cushion the economy’s fall. In Greece, required by Europe to follow a course of harsh austerity, that spending has fallen rapidly, even if it has not declined as rapidly as some Europeans want.

By the fifth year of the Depression, personal consumption spending had begun to recover in the United States. In Greece last year, it fell 9.1 percent, more than in any other year of the downturn.

Greece publishes monthly overall unemployment figures, but provides details only on a quarterly basis. The charts show the trends of joblessness by sex and age group through the third quarter of last year, the most recent available. Women are more likely to be unemployed in every age group shown, and older workers are far less likely to be jobless than younger ones. Even the groups that look good by comparison are doing poorly. Among men age 45 to 64, nearly one in six is out of work. Among men 30 to 44, the figure is one in five.

Rates for teenagers and people over 65 are not shown, since few of them are in the labor force. The picture is glum for those teenagers who do want jobs. The male unemployment rate is 52 percent, and the rate for women is 81.5 percent. Most of those over 65 who say they want to work do have jobs, but the proportion of such people in the labor force has been falling in recent years.

Floyd Norris comments on finance and the economy at

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Claims for Jobless Benefits Fall

Far fewer people are seeking new unemployment benefits than just three months ago, the Labor Department said Thursday.

The number of people applying for benefits fell last week to 366,000, the fewest since May 2008. If the number stayed that low consistently, it could signal that hiring is strong enough to lower unemployment, analysts say.

The unemployment rate in November was 8.6 percent. The last time jobless applications were this low, the rate was 5.4 percent.

The four-week average of weekly unemployment applications, which smooths fluctuations, dropped last week to 387,750. That’s the lowest four-week average since July 2008. The four-week average has declined in 10 of the last 12 weeks.

“Labor market conditions have taken a turn for the better in recent weeks,” Michael Gapen, an economist at Barclays Capital, said in a note to clients. “Payroll growth should improve in the coming months.”

Applications for unemployment benefits are a measure of the pace of layoffs. Job cuts have fallen sharply since the recession. Employers have been hiring at only a modest pace. But when applications fall below 375,000 consistently, that usually signals that hiring is strong enough to lower the unemployment rate.

The downward trend comes as Congress is wrangling over whether to extend emergency unemployment benefits, which are set to expire at the end of this year.

Other recent reports suggest the job market is improving a bit. In the past three months, net job gains have averaged 143,000 a month. That compares with an average of 84,000 in the previous three months.

In November, employers added 120,000 jobs, and the unemployment rate fell to 8.6 percent from 9 percent. That was the lowest unemployment rate in 2 and a half years. But about half that decline occurred because many of the unemployed gave up looking for work. When people stop looking for a job, they’re no longer counted as unemployed.

About 6.7 million people are receiving unemployment benefits. About 2 million will lose their benefits by mid-February if the emergency program expires.

Lawmakers differ over how long benefits should last. The House passed a Republican bill Tuesday that would renew emergency aid but reduce the maximum duration to 59 weeks from the current 99 weeks.

Democrats want to keep the full 99 weeks. The measure is part of broader legislation in the Democratic-led Senate that would also extend a Social Security tax cut.

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Economix: Searching for a Silver Lining



Dollars to doughnuts.

Not to be a Debbie Downer, but is there any good news in today’s jobs report?

First, the bad news:

  • The number of net nonfarm payroll jobs added in June was 18,000, which is not statistically significant from zero (since that’s compared to a base of about 131 million jobs). Job growth for the previous two months was revised downward, too.
  • The average duration of unemployment continues to break records, and in June was at an all-time high of 39.9 weeks. In other words the average unemployed worker has been looking for a job for nine months.
  • The unemployment rate ticked up to 9.2 percent, and not because more people joined the labor force. In fact, the overall size of the labor force was a little bit smaller.
  • As a result, the labor force participation rate — that is, the share of adults who are working or actively looking for work — is just 64.1 percent. The last time the rated dipped below that was in 1983, when women were less likely to be in the labor force.
  • A broader measure of unemployment, including those who are working part time because they can’t find full-time jobs as well as people who have given up looking for work, rose to 16.2 percent from 15.8 percent.
  • The average length of the work week for all private payroll employees fell by 0.1 hour to 34.3 hours in June, a very bad indicator for future job growth. Usually employers start increasing the hours of their existing employees before they bring on new hires.
  • Average hourly earnings for all employees on private nonfarm payrolls decreased by 1 cent to $22.99. Again, this does not bode well. Not only are we seeing a jobless recovery, but a wage-gain-less one, too.
  • Hiring in temporary help services was flat. Usually we see a bump in temp hiring that precedes more permanent hiring, so this is a disappointing figure too.

And now, the good news:

  • The number of people who are unemployed because they voluntarily left their jobs rose. So at least people are feeling freer to ditch jobs that they dislike … even if there aren’t better jobs available.

Sorry, that’s all I’ve got. Anybody see anything else uplifting in this report?

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