Unemployment in OECD countries eases in July but still higher than pre-pandemic levels
The jobless rate in the group's member countries fell to 7.7% in July from 8% in June
Unemployment in some of the world’s biggest economies eased in July but remains higher than it was before the Covid-19 pandemic, according to the Organisation for Economic Co-operation and Development.
The unemployment rate in the group's 37 member countries fell from 8 per cent in June to 7.7 per cent in July, the organisation said in a report on Wednesday.
However, the two figures were higher by 2.5 percentage points than the rate in February.
Although the unemployment rate among youth aged 15 to 24 declined by 0.6 percentage points in July, it remained 4.9 percentage points higher than February.
The outbreak, which disrupted global trade and halted air travel, has dealt a huge blow to the labour market.
Earlier this year, the OECD said the impact of the pandemic on the workforce of its member countries was 10 times larger than during the first three months of the 2008 financial crisis.
The OECD includes some of the world’s biggest economies such as the US, euro-area countries, the UK and Canada.
The organisation expects the unemployment rate in member countries to hit 9.4 per cent this year, from 5.3 per cent last year, if the outbreak is kept under control.
However, it could reach 12.6 per cent if there is a second wave of infections.
The state of employment also differed widely across various regions, the OECD said.
The unemployment rate in the euro area rose for a fourth consecutive month to 7.9 per cent in July, up from 7.7 per cent a month earlier.
Meanwhile, unemployment in Japan rose marginally to 2.9 per cent from 2.8 per cent in June.
However, the unemployment rate in the US and Canada fell by 1.4 percentage points and 0.9 percentage points to 10.9 per cent and 10.2 per cent, respectively.
The OECD attributed this to a fall in temporary redundancies.
Furthermore, early data in the first 15 days of August also pointed to continued declines in temporary redundancies, pushing unemployment down to 10.2 per cent in Canada and 8.4 per cent in the US.
The group said in June that it expected the world economy to shrink by 6 per cent this year before growing by 5.2 per cent in 2021, if the virus is contained.
The World Bank forecast a 5.2 per cent contraction for this year while the International Monetary Fund projected that output would shrink by 4.9 per cent.
In the event of a second wave of infections, the OECD expects the world economy to contract by 7.6 per cent before growing by 2.8 per cent in 2021.
OECD economies suffered the worst contraction on record in the second quarter of this year as economic activity slowed due to the pandemic.
Real gross domestic product for the three months to the end of June fell by 9.8 per cent, compared to a contraction of 0.9 per cent in the first quarter, the group said last month.
Updated: September 10, 2020 03:56 AM