Economy in Brief

Unemployment rate holds in October Unemployment in the European Monetary Union held at 6.4% in October. That's just a couple of ticks off its all-time low. Unemployment at 6% is also just a couple of ticks off its all-time low in the European Union, and unemployment in the EU also was unchanged in October from September.

A good October Conditions in Europe for unemployment remain extremely favorable although there are signs of pressure and the rate itself is slightly off of its all-time low. October, however, was a pretty good month for unemployment as the table gives us unemployment statistics for 12 monetary union members. Among those 12, only three had unemployment rates rise: Finland (from 9.6% to 10.3%), Belgium (from 6.3% to 6.4%), and Austria (from 5.6% to 5.8%). Outmatching the rising unemployment rates, we're falling unemployment rates in Italy, Luxembourg, Ireland, Greece, and Portugal. The raw number of unemployed in October in the EMU fell (while the raw number of unemployed rose slightly in the EU).

Not such good September and August results In September, month-to-month unemployment rates rose more broadly in seven countries while falling and only two countries. In August, unemployment rates rose in five countries while falling in only two countries. October was an unusually good month for the unemployment rate that fell much more broadly than rose across these 12 monetary union members. Also in August and September, the raw number of unemployed rose month-to-month in each month in both the EU and the EMU.

A more tempered sequential look Sequential changes in unemployment rates over three months, six months and 12 months show some backtracking and potentially unemployment unrest. Over three months unemployment rates rose in six countries and fell in only two countries. Over six months, the unemployment rates rose in eight countries and fell in four countries. Over 12 months unemployment rates rose in seven countries while falling in four countries. The number of unemployed rose period-to-period in each of these time segments in both the EU and the EMU. Sequentially, there has been more backtracking than there has been progress. But the unemployment rates are so low even holding the line is an exceptionally good performance.

Ranking the unemployment rates The ranking of the unemployment rate for the European Monetary Union as a whole is in its 5.8 percentile; it has been lower 5.8% of the time. The unemployment rate in the European Union has been lower about 7.4% of the time. Unemployment rates are above their respective medians (which means above a ranking of 50%) only in Austria, Finland, and Luxembourg among EMU members.

Inflation: still stubborn Just released data show some inflation stubbornness in the monetary union. Core inflation (Country level) continues to be stubborn above ECB target of 2%. We have core inflation data for some selected countries in the union, and we do not yet have core inflation measures for the monetary union as a whole.

Baltic dry goods index is on a run higher Still, there some good news in the offing; oil prices continue to slip which is good for the longer term outlook for inflation and the Baltic dry goods index is making a significant ongoing push higher; it's currently sitting at high the highest point we've seen in over a year. That should be a good sign for the outlook for manufacturing and for the goods sectors of these economies. It’s also good news for the development of unemployment rates. The Baltic dry goods index is an index of global shipping volume; its revival is a welcome event in the wake of the Trump tariffs.

The S&P manufacturing PMIs for November show split results with 9 reporters showing improvement and 9 reporters showing deterioration. The median value among reporters in November is 49.0, exactly the same as its the three-month average, but it's a downtick from 49.5 in October. The split in terms of improving or deteriorating is 50/50 in November and that compares to 61.1% improving versus about 39% deteriorating in October. Both of these diffusion readings are a tremendous step up from September when only 11% of the reporters improved month-to-month.

Sequentially, there's hardly any change at all and none worth speaking about. All of the values for three-months, six-months, and 12-months are either 49.0 or 49.1. Now compared to 12 months ago shows a diffusion of 55.6, indicating relatively more improvement than deterioration. For six-months versus 12-months, diffusion is at 66.7, indicating about 2/3 are improving and only one-third deteriorating. However, over three-months compared to six-months, the split on diffusion is at 50%, a wholly neutral value.

The queue standings that rank the November observations on data back to January 2021 show above 50% readings for eight of the 18 reporters in the table. Above their 50% mark (which means above their medians) are the euro area, Germany, the United States, the United Kingdom, India, Indonesia, Malaysia, and Vietnam. The global manufacturing results from the JP Morgan index which employs weighting is much higher at 68.4 percentile and compares to an unweighted Asian average of 54.7%, and the total average at 45.8%. Neither of the two average statistics employ weighting.

Assessing the change in manufacturing from January 2021 across the 18 reporters, only four have manufacturing indexes that are higher than they were at that time; those reporters are Mexico, Indonesia, Malaysia, and Vietnam.