European Labour Market Barometer: No new slump in Europe’s job market
Compared to the previous month, the European Labor Market Barometer rose by 0.5 points in December concluding the year at 98.9 points. The leading indicator of the European Network of Public Employment Services and the Institute for Employment Research (IAB) thus points to a likely moderate, negative development of the European labor market in the coming months.
„The public employment services in Europe expect the European labour market to withstand the second Corona wave,“ explains IAB head of forecast Enzo Weber, who initiated the European Barometer. The burdens of renewed lockdown measures in many countries are high, but there will not be a new labour market slump. Short-time work supports employment in many countries.
The European Labor Market Barometer’s sub-indicator for the development of unemployment rose by 0.4 to 99.2 points in December. At this value just below the neutral mark of 100 points, seasonally-adjusted unemployment in Europe is likely only to increase slightly. After a gain of 0.6 points, the employment sub-indicator shows moderately pessimistic expectations of the European employment services for the short-term employment trend at a level of 98.6 points. „The labour market is stabilising, but the road to recovery is still long in Europe,“ Weber said.
The European Labour Market Barometer is a monthly leading indicator based on a survey among the local or regional employment agencies in 16 participating public employment services. The survey is carried out jointly by the employment services and the IAB since June 2018. Participating countries include Austria, Bulgaria, Cyprus, the Czech Republic, Denmark, Belgium-DG, Belgium-Flanders, Germany, Iceland, Liechtenstein, Lithuania, Luxembourg, Malta, Poland, Portugal, and Belgium-Wallonia. While component A of the barometer signals the development of the seasonally adjusted unemployment figures for the next three months, component B forecasts employment trends. The average of the components „unemployment“ and „employment“ constitutes the total value of the barometer. This indicator thus provides an outlook on the overall development of the labour market. The scale ranges from 90 (very poor development) to 110 (very good development). First, a barometer score for each of the participating employment services is determined. The European barometer is then derived from these national scores in form of a weighted average.