Saturday, March 10, 2012

US Employment Data and Why Increased Public Spending Does Not Reduce Unemployment

US Non- Farm Payroll Data

The US non-farm payroll data was very strong but is it broad based? Moreover, what does this data tells us about whether countries should be stimulating employment growth via engaging in public spending?

Firstly, let’s look at average hours worked…

Economagic: Economic Chart Dispenser
BLS Hours Worked Chart

…and moreover the weekly American Staffing Association Index is showing that 2012 staffing levels are tracking significantly ahead of 2009-10-11. You can access the data here

So the overall picture is of a sustained recovery in the US.

An interesting comparison can be made with the Eurozone and the differences between the countries with youth unemployment data…

EU Youth Unemployment Chart

If we accept the start of 2010 as a benchmark, it is clear the countries doing very well (Germany, Austria, Netherlands) and even those showing moderate improvement (France, Finland, Belgium)  are those that have a better Debt/GDP situation.  The countries that are failing their youth are Portugal, Italy, Greece and Spain.

The message is clear. Racking up Government Debt via spending is not the solution to stimulating an economy or generating employment, particularly for the youth.

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