Macro roundup: Back on trend

Greece's labour market is normalising, with unemployment on a downward path

There was good news this week in July’s unemployment numbers, which showed Greece’s jobless rate coming down to its lowest level since October 2010.

The rate fell to 14.2 percent, from 15 percent in June, putting it back in line with the steady downward trend that it was on before the pandemic.

Compared with other euro-area countries, that’s still a painfully high rate — but the amount of people out of work is now less than half of what it was at its peak in 2013.

Crucially, the number of people classed as “inactive” has dropped by 300,000 since it peaked at 3.5 million in January. The classification of people outside the labour force — even though they may have been willing to work — because they weren’t actively looking for a job during the lockdowns has had a distorting effect on the headline during the pandemic.

However, with the number of people employed, unemployed and considered outside the labour force all now back to levels in line with the pre-pandemic trends, we can be more confident that the headline rate really does mean that unemployment is coming down.

More normal

Separately, the Hellenic Statistical Authority this week also released its quarterly unemployment data, which showed the rate fell to 15.8 percent in the second quarter from 17.1 percent in the first three months of the year.

Since this time series isn’t seasonally adjusted, I pay it less heed than the monthly data. But beneath the headline rate, the quarterly release also offers interesting granular detail.

During the pandemic, this has included data on how people have changed their way of working during the lockdown. The latest figures add to the picture of labour markets returning to normal, with the absences from work and hours worked reverting to their pre-pandemic levels.

Other data

  • The central government primary deficit for the first eight months of the year came to 6.4 billion euros, which means there was a surplus 2.7 billion euros in the month of August. This can mostly be explained by the disbursement of 2.3 billion euros from the EU’s Recovery and Resilience Facility — the first tranche of the funds to land on these shores.

  • Building activity in June, as measured by the number of permits issued, increased 17.9 percent compared with the same month in 2020. Surface area and volume increased 57.5 percent and 54.7 percent respectively.

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Next week’s key data

Monday, Sept. 20:
  • July balance of payments (Bank of Greece)

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