OECD Warns High Unemployment May Persist Till End-2013
Wednesday, 11 July 2012 | 00:00
Unemployment in advanced economies are expected to remain high until at least the end of 2013 mainly due to the current weak economic activity, with young people bearing the brunt of the crisis, a new report from the Organization for Economic Co-operation and Development (OECD) showed Tuesday.
In its annual Employment Outlook 2012, the Paris-based think tank said OECD-wide jobless rate is forecast to remain high at 7.7 percent in the fourth quarter of 2013. This would leave around 48 million people out of work across the OECD nations.
Pointing out that young people and the low-skilled continue to bear the brunt of the jobs crisis, the report said about 14 million jobs need to be created in the OECD area for employment rates to return to pre-crisis levels. The youth unemployment rate for the OECD area was just over 16 percent in May.
"The recent deterioration in the economic outlook is very bad news for the labour market," OECD Secretary-General Angel Gurria said.
"The young are at most risk of long-term damage to their careers and livelihoods."
Presenting the report in Paris, Gurria urged governments to use every possible means at their disposal to help jobseekers, especially young people, by removing barriers to job creation and investing in their education and skills.
The jobless rate in OECD countries remained steady at 7.9 percent rate in May. In the euro area, unemployment rose further in May to an all-time peak of 11.1 percent. It was 0.1 percentage point higher than in April and 3.8 percentage points higher than its record low of 7.3 percent in March 2008.
In June, the unemployment rate was unchanged at 8.2 percent in the U.S. and fell 0.1 percentage point from a month earlier to 7.2 percent in Canada.
According to the projections reported in the outlook report, the rate will continue to decline gradually in the U.S. through the fourth quarter of 2013, when it will reach 7.4 percent.
In OECD countries, the unemployment rate was the highest in Spain at 24.6 percent in May. Double-digit unemployment rates were recorded in Estonia, France, Greece, Hungary, Ireland, Italy, Portugal and Slovakia.
In most key emerging economies, with the exception of South Africa, labor markets have weathered the crisis well. "But there have been recent signs of a slowdown in the rapid pace of economic and employment growth in some, notably Brazil, China and India," OECD observed.
The U.K. foresee some increase in the unemployment rate that could even reach 9 percent in 2013. In Japan, the unemployment rate stood at 4.4 percent in May, half-a-percentage point higher than at the onset of the crisis, and is expected to remain largely stable throughout the rest of 2012.
Around one in three in OECD area have been out of work for 12 months or more, the report said. The share of long-term unemployed remains highest in EU countries, at around 44 percent on average. In the U.S., the share of long-term unemployment has soared to around 30 percent from from 10 percent during pre-crisis period.
Source: RTT News