Europe on the skids?

GDP data for 2012 Q4 is scheduled to be released mid-February, here is the schedule. Recent news and notes from the blogs suggests that the German economy has slowed and may continue to do so, promoting fears of a slip back into recession territory. In terms of labor market outcomes, Germany remains the only country significantly above its employment levels compared to the 2008 peak. Spain continues its freefall, while most other countries have climbed back to roughly the same employment level of four years ago. Moreover, unemployment rates in many of the countries (Germany still falling and the U.K. moving sideways) in the EU have begun to drift upwards. While the U.S. had a larger percentage increase in the unemployment rate than any country except Spain over the past 4 years, it has now seen a decline in unemployment rates similar to that of Germany.

Labor force participation rates for most countries have been inching upward. Employment to population ratios have seen very little change for most countries: Germany continues to rise and Spain fall. For  comparison, we include the U.S. in the employment to population rate graph. In this dimension, only Spain has suffered worse than the U.S.-there is not yet much evidence that the employment to population ratio in the U.S. shows signs of improvement.

GDP: Per Capita Comparisons

In earlier posts we presented GDP for several countries and the U.S. (presented below for reference), the data showed that the U.S. and Germany looked very similar in terms of their bounce-back from the Great Recession others have not fared as well.

However, looking at per capita GDP tells a slightly different story: Germany is the only country in per capita terms to have returned to the level of 4 years ago. Still, only the U.S. and Germany have seen sustained growth since the bottom of the recession. Per capita U.S. consumption growth has been strong. In terms of government consumption expenditures per capita, there is wide discrepancy across countries, with the U.S. lying somewhere in between.



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