Economy in Brief

European unemployment is very well-behaved Despite well publicized threats from all corners and all sorts of uncertainty, the unemployment rate in the European Monetary Union (EMU) ticked down to 6.2% in April from 6.3% in March, tying it for its lowest rate since the formation of the monetary union itself. In the broader Economic Union, the unemployment rate remained at 5.9% now; it's just a tick above its low point on the same timeline.

Unemployment remains low Over 12 months the EU unemployment has fallen by 0.1% while the European Monetary Union (EMU) unemployment rate has fallen by 0.2%. This is a period in which the situation in the Middle East has remained hot, the Russia-Ukraine war has dragged on despite efforts by Donald Trump to try to bring both participants in that conflict to the table to talk and to get a negotiated peace, even more prominently, during this time, the United States has been threatening tariffs! Economists have been looking for all kinds of bad things to happen but instead the unemployment rate continues to drop and inflation rates in the United States and in Europe have continued to edge slightly lower.

Are economic concerns overblown? I'm not going to claim that the economic concerns about uncertainty are completely unfounded or that we're not going to have some difficult economic times over tariffs eventually. But the decision by economists to ramp up concerns about uncertainty and how terrible uncertainty is, and how bad it's going to be for our economies, does not seem to be bearing fruit. Economics has moved from the notion that income and prices matter to the notion that income expectations and price expectations matter. We ae now firmly in the land of perceptions and expectations- but maybe we should also keep one foot in the land of reality - the Church of what’s Happenin’ now, as Flip Wilson Once called it in his comedy routine. We're in a period where there's very little going on in terms of policy change, but there's a lot that we expect to happen moving forward although we're not sure precisely what it is. There are concerns about how the tariff negotiations will work out and if there's going to be a trade war; certainly if our countries cannot civilly adjudicate their differences, a trade war will be very bad for the participants. But so far, all the gnashing of teeth about the impact of uncertainty is at the very least whistling past the graveyard.

Ongoing excellent performance Unemployment rates in the European Monetary Union in April fell in seven of the 12 reporting monetary union countries in the table. In March, unemployment rates fell in only one country, in Luxembourg. In February, unemployment rates fell in five of the 12 countries. Over three months, there were unemployment rate declines in five countries with unemployment unchanged in two. Over six months, unemployment rates fell in six countries and unemployment rates were unchanged in two. Over 12 months, unemployment rates fell in six countries. The declines over these broader periods of time seemed to be still, consistently in force.

Strong historic comparisons If we look at the levels of the unemployment rates evaluated since 1994, we find only three monetary union members with unemployment rates above their historic medians in this period. The exceptions are Luxembourg, Finland, and Austria. Including the countries at the bottom of the table that are not monetary union members, the United Kingdom (based on its claimant rate) is also above its historic median. Japan's rate is in its lower 12th percentile and the U.S. is in its lower 25th percentile. EU and EMU rates each rank within their lower five percentile! Altogether, it’s an impressive performance. Look at it. Read the economic/Financial press. Connect the dots- if that is at all possible.