The unemployment rate in the OECD area dropped from 7.1% to 6.9% in November 2020 but remained 1.6 percentage points above the pre-pandemic levels seen in February of last year.
However, much of the statistical decline resulted from temporary laid-off workers returning to work in the United States. The US and Canada classes furloughed workers as unemployed, while other countries consider them employed.
The OECD statistics also do not reflect the full effect of the pandemic because certain non-employed people may be regarded as ‘out of the labour force’ because they cannot actively look for work or are unable to work because of family responsibilities due to schools and care services being closed during lockdowns.
In the euro area, the unemployment rate declined from 8.4% to 8.3% in November. Finland, Italy, the Netherlands and Portugal all saw their unemployment rates drop by 0.3%. In France, Ireland and Spain, in contrast, unemployment rates increased by 0.2 percentage points.
In the US and Canada, the unemployment rate fell by 0.2 and 0.4 percentage points, respectively, to 6.7% and 8.5%, but remained about three percentage points higher than in February.
In all, 45.5 million people were unemployed in the OECD area, about 10.7 million more than in February.
Meanwhile, OECD composite leading indicators (CLIs), which are qualitative indicators, such as consumer confidence, that have shown a predictive relationship with GDP, have continued to recover in most major economies in December 2020 from COVID-19 crisis lows.
However, the pace of growth varies. CLIs for the US, Japan, India, Russia and the euro area suggest stable growth, while in the UK indicators are pointing to an economic slowdown.
In Canada, Brazil and China, on the other hand, CLIs signal steady economic growth, the OECD reported.