The euro zone's sick labour markets

By P.W.

TODAY'S Employment Outlook from the OECD, an intergovernmental think-tank based in Paris, makes depressing reading, above all for the euro area. This annual health-check of labour-market trends highlights the abysmal performance of the single-currency zone. Unemployment will remain around 8% across the OECD’s 34 mainly rich countries until the end of 2014 as continuing rises in some euro-zone states offset falls elsewhere. Whereas the jobless rate in the United States will fall from 8.1% last year to 7.0% in 2014, it will rise in the euro area from 11.2% to 12.3%.

The findings are a tacit rebuke to European leaders like François Hollande, the French president, who hailed the end of the euro crisis in early June. True, the market panic a year ago has subsided. But it has not gone away entirely: Portuguese 10-year sovereign bond yields for example have jumped in the past two months by two percentage points to over 7% as markets fret about whether the troubled government can stay the course. The political wavering in Lisbon reflects the economic and social pain that Portugal is suffering most notably in high unemployment, as its jobless rate has more than doubled from a pre-crisis average (for the years 2005-08) of 7.7% to a a projected 18.6% in 2014.