Employment in the Organisation for Economic Cooperation and Development (OECD) area dropped to 64.6 per cent in the second quarter of this year – its lowest level since the end of 2010.
The number of people with jobs fell to 560 million in the three months ended June 30, representing a 4 percentage point drop with 34 million fewer people in work than in the previous quarter, according to the OECD, which covers 37 countries across the globe.
“Employment rates fell across all population groups,” the OECD said on Thursday. “While male and female employment rates fell by around 4 percentage points (to 72 per cent and 57.3 per cent respectively), the youth employment rate dropped more sharply (down 5.6 percentage points, to 36.3 per cent) than for people aged 25-54 and those aged 55-64.”
The global economy is set to contract 4.4 per cent this year as a result of the pandemic, according to the International Monetary Fund, with the crisis costing as much as $28 trillion in output losses over the coming five years.
The OECD said a large part of the employment fall in the second quarter reflects an increase in furloughed workers in the US and Canada, which records this category of worker as unemployed. It meant employment rates dropped 8.5 percentage points to 64.7 per cent in Canada and 8.9 percentage points to 62.5 per cent in the US.
In the euro area, employment decreased to 66.2 per cent, with the highest decreases of 3 percentage points found in Estonia, Ireland and Spain.
A second wave of Covid-19 is dampening the economic recovery in Europe, S&P Global Ratings said on Thursday, following a rapid upswing in activity after reopening from the first set of restrictions.
"We see gross domestic product contracting by 7.4 per cent this year across the eurozone (versus the 7.8 per cent drop in June) and rebounding by 6.1 per cent next year. Most support measures have been extended as some sectors will remain under strain until a vaccine is available, which could be around mid-2021," said Sylvain Broyer, S&P Global's EMEA chief economist.