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Mapped: Unemployment Forecasts, by Country in 2023

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Unemployment Forecasts for 2023

Mapped: Unemployment Forecasts, by Country in 2023

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As 2022 clearly illustrated, the global job market can surprise expectations.

So far, this year is no different. The unemployment rate in six of the G7 countries hovers near the lowest in a century. With an unemployment rate of 3.4%, the U.S. jobless rate hasnโ€™t fallen this low since 1969.

But as some economies navigate a strong labor market against high inflation and hawkish monetary policy, others are facing more challenging conditions. In the above graphic, we map unemployment forecasts in 2023 using data from the IMF’s World Economic Outlook.

Uncertainty Clouds the Surface

Across many countries, the pandemic has made entrenched labor trends worse. It has also altered job market conditions.

South Africa is projected to see the highest jobless rate globally. As the most industrialized nation on the continent, unemployment is estimated to hit 35.6% in 2023. Together, slow economic growth and stringent labor laws have prevented firms from hiring workers. Over the last two decades, unemployment has hovered around 20%.

Country / Region2023 Unemployment Rate(Projected)
๐Ÿ‡ฟ๐Ÿ‡ฆ South Africa35.6%
๐Ÿ‡ธ๐Ÿ‡ฉ Sudan30.6%
๐Ÿ‡ต๐Ÿ‡ธ West Bank and Gaza25.0%
๐Ÿ‡ฌ๐Ÿ‡ช Georgia19.5%
๐Ÿ‡ง๐Ÿ‡ฆ Bosnia and Herzegovina17.2%
๐Ÿ‡ฆ๐Ÿ‡ฒ Armenia15.1%
๐Ÿ‡ฒ๐Ÿ‡ฐ North Macedonia15.0%
๐Ÿ‡จ๐Ÿ‡ท Costa Rica13.2%
๐Ÿ‡ง๐Ÿ‡ธ The Bahamas12.7%
๐Ÿ‡ช๐Ÿ‡ธ Spain12.3%
๐Ÿ‡ฌ๐Ÿ‡ท Greece12.2%
๐Ÿ‡จ๐Ÿ‡ด Colombia11.1%
๐Ÿ‡ฒ๐Ÿ‡ฆ Morocco10.7%
๐Ÿ‡ธ๐Ÿ‡ท Suriname10.6%
๐Ÿ‡น๐Ÿ‡ท Turkiye10.5%
๐Ÿ‡ง๐Ÿ‡ง Barbados10.0%
๐Ÿ‡ฆ๐Ÿ‡ฑ Albania10.0%
๐Ÿ‡ต๐Ÿ‡ฆ Panama10.0%
๐Ÿ‡ท๐Ÿ‡ธ Serbia9.7%
๐Ÿ‡ฎ๐Ÿ‡ท Iran9.6%
๐Ÿ‡บ๐Ÿ‡ฟ Uzbekistan9.5%
๐Ÿ‡ง๐Ÿ‡ท Brazil9.5%
๐Ÿ‡ฎ๐Ÿ‡น Italy9.4%
๐Ÿ‡ฐ๐Ÿ‡ฌ Kyrgyz Republic9.0%
๐Ÿ‡จ๐Ÿ‡ป Cabo Verde8.5%
๐Ÿ‡จ๐Ÿ‡ฑ Chile8.3%
๐Ÿ‡ง๐Ÿ‡ฟ Belize8.0%
๐Ÿ‡ต๐Ÿ‡ท Puerto Rico7.9%
๐Ÿ‡บ๐Ÿ‡พ Uruguay7.9%
๐Ÿ‡ฆ๐Ÿ‡ผ Aruba7.7%
๐Ÿ‡ซ๐Ÿ‡ท France7.6%
๐Ÿ‡ต๐Ÿ‡ช Peru7.5%
๐Ÿ‡ธ๐Ÿ‡ป El Salvador7.5%
๐Ÿ‡ธ๐Ÿ‡ช Sweden7.4%
๐Ÿ‡ซ๐Ÿ‡ฎ Finland7.4%
๐Ÿ‡ฒ๐Ÿ‡บ Mauritius7.4%
๐Ÿ‡ช๐Ÿ‡ฌ Egypt7.3%
๐Ÿ‡ฑ๐Ÿ‡ป Latvia7.2%
๐Ÿ‡ณ๐Ÿ‡ฎ Nicaragua7.2%
๐Ÿ‡ฑ๐Ÿ‡น Lithuania7.0%
๐Ÿ‡ฆ๐Ÿ‡ท Argentina6.9%
๐Ÿ‡ช๐Ÿ‡ช Estonia6.8%
๐Ÿ‡ง๐Ÿ‡ณ Brunei Darussalam6.8%
๐Ÿ‡ฒ๐Ÿ‡ณ Mongolia6.6%
๐Ÿ‡ญ๐Ÿ‡ท Croatia6.6%
๐Ÿ‡จ๐Ÿ‡พ Cyprus6.5%
๐Ÿ‡ต๐Ÿ‡น Portugal6.5%
๐Ÿ‡ต๐Ÿ‡ฐ Pakistan6.4%
๐Ÿ‡ต๐Ÿ‡พ Paraguay6.4%
๐Ÿ‡ธ๐Ÿ‡ฐ Slovak Republic6.2%
๐Ÿ‡ฉ๐Ÿ‡ด Dominican Republic6.2%
๐Ÿ‡จ๐Ÿ‡ฆ Canada5.9%
๐Ÿ‡ฆ๐Ÿ‡ฟ Azerbaijan5.8%
๐Ÿ‡ธ๐Ÿ‡ฒ San Marino5.7%
๐Ÿ‡ง๐Ÿ‡ช Belgium5.6%
๐Ÿ‡ท๐Ÿ‡ด Romania5.5%
๐Ÿ‡ซ๐Ÿ‡ฏ Fiji5.5%
๐Ÿ‡ต๐Ÿ‡ญ Philippines5.4%
๐Ÿ‡ฎ๐Ÿ‡ฉ Indonesia5.3%
๐Ÿ‡ฉ๐Ÿ‡ฐ Denmark5.3%
๐Ÿ‡ฑ๐Ÿ‡ฐ Sri Lanka5.0%
๐Ÿ‡ฑ๐Ÿ‡บ Luxembourg5.0%
๐Ÿ‡ฎ๐Ÿ‡ช Ireland4.8%
๐Ÿ‡ฐ๐Ÿ‡ฟ Kazakhstan4.8%
๐Ÿ‡ฌ๐Ÿ‡ง United Kingdom4.8%
๐Ÿ‡ง๐Ÿ‡ฌ Bulgaria4.7%
๐Ÿ‡ฆ๐Ÿ‡น Austria4.6%
๐Ÿ‡ญ๐Ÿ‡ณ Honduras4.6%
๐Ÿ‡บ๐Ÿ‡ธ U.S.4.6%
๐Ÿ‡ง๐Ÿ‡ญ Bahrain4.4%
๐Ÿ‡ท๐Ÿ‡บ Russia4.3%
๐Ÿ‡ง๐Ÿ‡พ Belarus4.3%
๐Ÿ‡ธ๐Ÿ‡ฎ Slovenia4.3%
๐Ÿ‡ฒ๐Ÿ‡พ Malaysia4.3%
๐Ÿ‡จ๐Ÿ‡ณ China4.1%
๐Ÿ‡ฎ๐Ÿ‡ธ Iceland4.0%
๐Ÿ‡ง๐Ÿ‡ด Bolivia4.0%
๐Ÿ‡ญ๐Ÿ‡ฐ Hong Kong SAR4.0%
๐Ÿ‡ณ๐Ÿ‡ฑ Netherlands3.9%
๐Ÿ‡ณ๐Ÿ‡ฟ New Zealand3.9%
๐Ÿ‡ญ๐Ÿ‡บ Hungary3.8%
๐Ÿ‡ณ๐Ÿ‡ด Norway3.8%
๐Ÿ‡ฎ๐Ÿ‡ฑ Israel3.8%
๐Ÿ‡ช๐Ÿ‡จ Ecuador3.8%
๐Ÿ‡ฆ๐Ÿ‡บ Australia3.7%
๐Ÿ‡ฒ๐Ÿ‡ฝ Mexico3.7%
๐Ÿ‡น๐Ÿ‡ผ Taiwan 3.6%
๐Ÿ‡ฒ๐Ÿ‡ฉ Moldova3.5%
๐Ÿ‡ฐ๐Ÿ‡ท South Korea3.4%
๐Ÿ‡ฉ๐Ÿ‡ช Germany3.4%
๐Ÿ‡ฒ๐Ÿ‡น Malta3.3%
๐Ÿ‡ต๐Ÿ‡ฑ Poland3.2%
๐Ÿ‡ธ๐Ÿ‡จ Seychelles
3.0%
๐Ÿ‡ฒ๐Ÿ‡ด Macao SAR2.7%
๐Ÿ‡ฏ๐Ÿ‡ต Japan2.4%
๐Ÿ‡จ๐Ÿ‡ญ Switzerland2.4%
๐Ÿ‡ป๐Ÿ‡ณ Vietnam2.3%
๐Ÿ‡จ๐Ÿ‡ฟ Czech Republic2.3%
๐Ÿ‡ธ๐Ÿ‡ฌ Singapore2.1%
๐Ÿ‡น๐Ÿ‡ญ Thailand 1.0%

In Europe, Bosnia and Herzegovina is estimated to see the highest unemployment rate, at over 17%. It is followed by North Macedonia (15.0%) and Spain (12.7%). These jobless rates are more than double the projections for advanced economies in Europe.

The U.S. is forecast to see an unemployment rate of 4.6%, or 1.2% higher than current levels.

This suggests that todayโ€™s labor market strength will ease as U.S. economic indicators weaken. One marker is the Conference Boardโ€™s Leading Economic Index, which fell for its tenth straight month in December. Lower manufacturing orders, declining consumer expectations, and shorter work weeks are among the indicators it tracks.

Like the U.S., many advanced countries are witnessing labor market strength, especially in the United Kingdom, Asia, and Europe, although how long it will last is unknown.

A Closer Look at U.S. Numbers

Unlike some declining economic indicators mentioned above, the job market is one of the strongest areas of the global economy. Even as the tech sector reports mass layoffs, unemployment claims in the U.S. fall below recent averages. (Itโ€™s worth noting the tech sector makes up just 4% of the workforce).

In 2022, 4.8 million jobs were added, more than double the average seen between 2015-2019. Of course, the pandemic recovery has impacted these figures.

Some analysts suggest that despite a bleaker economic outlook, companies are hesitant to conduct layoffs. At the same time, the labor market is absorbing workers who have lost employment.

Consider the manufacturing sector. Even as the January ISM Purchasing Managers Index posted lower readings, hitting 47.4โ€”a level of 48.7 and below generally indicates a recessionโ€”factories are not laying off many workers. Instead, manufacturers are saying they are confident conditions will improve in the second half of the year.

Containing Aftershocks

Today, strong labor markets pose a key challenge for central bankers globally.

This is because the robust job market is contributing to high inflation numbers. Yet despite recent rate increases, the impact has yet to prompt major waves in unemployment. Typically, monetary policy moves like these takes about a year to take peak effect. To combat inflation, monetary policy has been shown to take over three or even four years.

The good news is that inflation can potentially be tamed by other means. Fixing supply-side dynamics, such as preventing supply shortages and improving transportation systems and infrastructure could cool inflation.

As investors closely watch economic data, rising unemployment could come on the heels of higher interest rates, but so far this has yet to unravel.

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Visualizing the Rise of the U.S. Dollar Since the 19th Century

This animated graphic shows the U.S. dollar, the world’s primary reserve currency, as a share of foreign reserves since 1900.

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Visualizing the Rise and Fall) of the U.S. Dollar

Visualizing the Rise of the U.S. Dollar Since the 19th Century

As the world’s reserve currency, the U.S. dollar made up 58.4% of foreign reserves held by central banks in 2022, falling near 25-year lows.

Today, emerging countries are slowly decoupling from the greenback, with foreign reserves shifting to currencies like the Chinese yuan.

At the same time, the steep appreciation of the U.S. dollar is leading countries to sell their U.S. foreign reserves to help prop up their currencies, in turn buying currencies such as the Australian and Canadian dollars to help generate higher yields.

The above animated graphic from James Eagle shows the rapid ascent of the U.S. dollar over the last century, and its gradual decline in recent years.

Dollar Dominance: A Brief History

In 1944, the U.S. dollar became the worldโ€™s reserve currency under the Bretton Woods Agreement. Over the first half of the century, the U.S. ran budget surpluses while increasing trade and economic ties with war-torn countries, expanding its influence as the worldโ€™s store of value.

Later through the 1960s, the U.S. dollar share of global foreign reserves rapidly increased as political allies stockpiled the dollar.

By 2000, dollar dominance hit a peak of 71% of global reserves. With the creation of the European Union a year earlier, countries such as China began increasing the share of euros in reserves. Between 2000 and 2005, the share of the dollar in Chinaโ€™s foreign exchange reserves fell by an estimated 15 percentage points.

The dollar began a long rally after the global financial crisis, which drove central banks to cut their dollar reserves to help bolster their currencies.

Fast-forward to today, and dollar reserves have fallen roughly 13 percentage points from their historical peak.

The State of the World’s Reserve Currency

In 2022, 16% of Russiaโ€™s export transactions were in yuan, up from almost nothing before the war. Brazil and Argentina have also begun adopting the Chinese currency for trade or reserve purposes. Still, the U.S. dollar makes up 80% of Brazilโ€™s reserves.

Yet while the U.S. dollar has decreased in share of foreign reserves, it still has an immense influence in the world economy.

The majority of trade is invoiced in the U.S. dollar globally, a trend that has stayed fairly consistent over many decades. Between 1999-2019, 74% of trade in Asia was invoiced in dollars and in the Americas, it made up 96% of all invoicing.

Furthermore, almost 90% of foreign exchange transactions involve the U.S. dollar thanks to its liquidity.

However, countries are increasingly finding alternative options than the dollar. Today, Western businesses have begun settling trade with China in renminbi. Looking further ahead, digital currencies could provide options that donโ€™t include the U.S. dollar.

Even more so, if the U.S. share of global GDP continues to shrink, the shift to a multipolar system could progress over this century.

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