OECD unemployment rate rose slightly in April to 6.6%

Despite a more positive economic outlook, the jobless rate remains 1.3 per cent above pre-pandemic level

A hiring sign is seen at the Burger Boy restaurant in Kentucky, US. While OECD unemployment is lower than the April 2020 peak, this largely reflects the return of temporary laid-off workers in the US and Canada, where they are recorded as unemployed. ReutersShow less

The unemployment rate in Organisation for Economic Co-operation and Development countries increased slightly in April to 6.6 per cent from 6.5 per cent in March, the first monthly increase since the April 2020 peak.

The total number of unemployed workers across the OECD area, which includes eurozone countries as well as the US, Australia, Japan and the UK, among others, rose by 0.7 million to reach 43.8 million in April, despite the global economy slowly recovering from the Covid-19 crisis as the vaccination drive ramps up.

While unemployment is down from the 8.8 per cent figure recorded in April last year, the OECD said “some care is needed in interpreting the fall in the OECD area unemployment rate compared to the April 2020 peak”.

“This largely reflects the return of temporary laid-off workers in the US and Canada, where they are recorded as unemployed,” the OECD said.

The jobless rate in April remained 1.3 per cent above the rate recorded in February last year, before the pandemic affected the labour market.

Meanwhile, in the eurozone, a marginal decline in the unemployment rate to 8 per cent was recorded, from 8.1 per cent in March, but that is still 0.7 per cent above its pre-pandemic level.

Outside Europe, the unemployment rate increased in several countries, rising 1.2 per cent in Colombia to 15 per cent, by 0.6 per cent in Canada and Mexico to 8.1 per cent and 4.9 per cent respectively, and by 0.1 per cent in the US to 6.1 per cent.

“More recent data show that the unemployment rate increased marginally in Canada to 8.2 per cent while it fell by 0.3 percentage points in the US to 5.8 per cent in May 2021,” the OECD said.

In April, the International Monetary Fund raised its global economic forecast for the second time this year, thanks to the faster-than-expected Covid-19 vaccination drive, as well as fiscal and monetary support provided by governments and central banks.

The global economy is now set to grow 6 per cent this year, compared with a previous forecast of 5.5 per cent, the Washington-based lender said in its latest World Economic Outlook. However, it warned policymakers about an uneven recovery as richer countries rebound faster from the crisis.