Macro roundup: Hard nut to crack

Unemployment officially dropped in November; 'true' picture difficult to see in the data

Unemployment data for November this week showed the jobless rate fell for a fourth month — something that should be taken with a large pinch of salt given how the pandemic has affected measurement of the rate.

While the headline rate dropped to 16.2 percent from 16.4 percent in October, both the number of employed and unemployed people dropped as the country headed into its second lockdown, with people surveyed who weren’t actively looking for work classified as “inactive”.

Before the pandemic, the size of the inactive work-age population had previously last undergone a sustained period of growth in 2011 — another period of acute economic crisis in Greece — and it was shrinking at a fairly quick pace in 2019. It surged during the first lockdown in spring, but the distortion seemed to have worked itself out of the numbers by autumn, with year-on-year declines resuming in September and October.

Regular readers will know that last year I used a very basic calculation to guess a “shadow” rate of unemployment, based on shifting 80 percent of the year-on-year increase in the inactive population back into the “active” labour force. Doing this for November would show this shadow unemployment rate rising in November for the first time in six months, to 16.5 percent from 16.1 percent in October. But the fact that the official rate was higher than this shadow rate before the latest release suggests this heuristic’s useful shelf life may have expired.

Furlough schemes are also distorting the official data, with many people under suspended contracts still classed as employed. While official numbers on how many people this encompasses aren’t publicly available, as far as I’m aware, Naftemporiki reported last week that in January it was 642,153 employees, a similar number to April. For a scale comparison, the non-seasonally-adjusted number from Elstat for the employed population in November was 3.83 million.

Separately, the Labour Ministry said yesterday that the employment balance was positive in January, with 2,338 more people hired in January than left their jobs.

But the overwhelming picture presented in the Labour Ministry data is of a labour market in stasis. The combined total of people starting new jobs or leaving old ones in January was 191,398, compared with 372,582 in the same month of 2020.

Other data

  • Industrial production increased for a second month in December, after rising 8.9 percent in November. Most of December’s rise was due to an increase in electricity supply, and manufacturing was flat. Overall, the IP index fell an average 2.1 percent in 2020, with manufacturing dropping 1.6 percent.

  • Building activity as measured by permits issued dropped 12.4 percent in November compared with a year earlier, after falling 4.9 percent in October. Despite dropping for two months, the number of permits issued in the first 11 months of the year rose 10.2 percent compared with 2019.

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Next week’s key data

  • January consumer price index (Elstat)

  • January central government budget execution (Finance Ministry, probably on Monday, but they’re flaky like that)

  • December business revenue

Elsewhere on the web

  • Over at MacroPolis, Georgia Nakou chews over the latest figures from Greece’s public sector staff census (spoiler alert: new administration comes in and does the same things it attacked the previous administration for doing)

  • If you love game theory, and you love recovery funds, then you are really going to love this on veto player theory and governance of the RRF (perhaps — I haven’t had time to read it yet, but it looks interesting)

  • Nektaria Stamouli reports for Politico on the western Balkans going east for coronavirus vaccines

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