European nations are currently experiencing a notable turn of events, much like stumbling upon an unexpected windfall. That’s likely the sentiment some European nations are experiencing now, thanks to the eurozone’s recent revelation of better-than-expected employment figures.
The eurozone, comprising EU countries that use the Euro as their primary currency, reported a remarkable drop in the unemployment rate to 6.4% in November, marking a record low seen only once since the 2008 Great Recession, according to Eurostat. Greece (9.4% down from 11.9%) and Spain (11.9% down from 12.9%) led the pack with the biggest year-over-year declines in unemployment.
However, amid the positive news, economic experts caution against unfettered optimism. Some European companies retained more employees than necessary last year, leading to concerns about low productivity. Melanie Debono, an economist at Pantheon Macroeconomics consulting firm, noted that surveys indicate declining hiring intentions, particularly in the manufacturing sector, where firms are considering layoffs due to bleak sectoral outlooks.
Zooming out, the eurozone’s unemployment rate remains higher than that of the US (3.7%). The International Labor Organization (ILO) anticipates a slight uptick in the global unemployment rate in 2024 (from 5.1% in 2023 to 5.2% this year), citing persistent productivity levels and technology skills shortages, as reported by EuroNews.
Gilbert Houngbo, director-general of the ILO, emphasized the urgency of addressing workforce challenges, highlighting their potential threat to both individual livelihoods and business sustainability.
As the eurozone navigates through 2024, it might be worthwhile to explore a few more options for further unexpected ways to increase the rate of employment.