Charting the Global Economy: U.S. Job Market Springs Back

(Bloomberg) -- The U.S. labor market defied expectations for a Depression-style surge in unemployment as pandemic-related lockdowns began to lift and the European Central Bank boosted its bond-buying program to ease the economic pain wrought by the coronavirus.

Here are some of the charts that appeared on Bloomberg this week, offering insight into the latest developments in the global economy:

U.S.

Employers added 2.5 million workers to their payrolls in May, trouncing forecasts for a 7.5 million decline. The jobless rate unexpectedly dropped to 13.3% from 14.7% as states began re-opening their economies.

U.S. trade in goods and services tumbled in April to the lowest level since May 2010 as the Covid-19 pandemic stifled demand around the world. Exports plunged 20.5% from the prior month to $151.3 billion, while imports decreased 13.7% to $200.7 billion.

Europe

The European Central Bank intensified its response to the “unprecedented contraction” facing the euro area with a bigger-than-anticipated increase to its emergency bond-buying program. In 2020, the bloc will likely see a contraction of 8.7% before rebounding by 5.2% in 2021. Under a more severe scenario with a strong resurgence of infections, output could shrink by as much as 12.6% this year.

In Germany, the crisis has cost more than 600,000 people their jobs in the past two months. The increase -- though bad -- has to be set against the impact of a government program that’s estimated to have protected more than 7 million workers.

Bloomberg Economics estimates that 10% of Europe’s labor supply could be unlocked as schools and nurseries reopen.

Asia

Japan’s ramped-up support for its economy is likely to require a third extra budget to help plug a record hole between surging spending and sliding tax receipts.

The country’s headline unemployment data doesn’t tell the full story of its jobless pain: Figures last week showed the unemployment rate ticked up to just 2.6% in April -- problem is, the numbers don’t include an extra 4.2 million people, who are technically still attached to their employers but aren’t actually working and may not be getting full paychecks, if anything.

China’s central bank is trying to fix one of the domestic economy’s most intractable problems: Poor access to credit by small companies.

Emerging Markets

Emerging market central banks have cut rates by more than 20 percentage points in the last three months to stimulate their coronavirus-ravaged economies, according to Bloomberg Economics. A number are also considering asset purchase programs.

Kenya surpassed Angola as sub-Saharan Africa’s third-largest economy in dollar terms, according to International Monetary Fund estimates. The coronavirus pandemic is set to exacerbate that: restrictions to limit its spread will probably see Angola’s gross domestic product contract 1.4% in 2020, while Kenya’s is projected to grow by 1%, according to the IMF.

World

Bloomberg Economics’ global GDP growth tracker suggests output fell for a third month, albeit at a slower pace. The latest tracker reading shows the global economy contracting at an annualized rate of 2.3% in May, up from a drop of 4.8% in April, but still a far cry from growth of 4.2% at the start of the year.

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