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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

This was originally posted on Advisor Channel. Sign up to the free mailing list to get beautiful visualizations on financial markets that help advisors and their clients.

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 hasn’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)
🇿🇦 South Africa35.6%
🇸🇩 Sudan30.6%
🇵🇸 West Bank and Gaza25.0%
🇬🇪 Georgia19.5%
🇧🇦 Bosnia and Herzegovina17.2%
🇦🇲 Armenia15.1%
🇲🇰 North Macedonia15.0%
🇨🇷 Costa Rica13.2%
🇧🇸 The Bahamas12.7%
🇪🇸 Spain12.3%
🇬🇷 Greece12.2%
🇨🇴 Colombia11.1%
🇲🇦 Morocco10.7%
🇸🇷 Suriname10.6%
🇹🇷 Turkiye10.5%
🇧🇧 Barbados10.0%
🇦🇱 Albania10.0%
🇵🇦 Panama10.0%
🇷🇸 Serbia9.7%
🇮🇷 Iran9.6%
🇺🇿 Uzbekistan9.5%
🇧🇷 Brazil9.5%
🇮🇹 Italy9.4%
🇰🇬 Kyrgyz Republic9.0%
🇨🇻 Cabo Verde8.5%
🇨🇱 Chile8.3%
🇧🇿 Belize8.0%
🇵🇷 Puerto Rico7.9%
🇺🇾 Uruguay7.9%
🇦🇼 Aruba7.7%
🇫🇷 France7.6%
🇵🇪 Peru7.5%
🇸🇻 El Salvador7.5%
🇸🇪 Sweden7.4%
🇫🇮 Finland7.4%
🇲🇺 Mauritius7.4%
🇪🇬 Egypt7.3%
🇱🇻 Latvia7.2%
🇳🇮 Nicaragua7.2%
🇱🇹 Lithuania7.0%
🇦🇷 Argentina6.9%
🇪🇪 Estonia6.8%
🇧🇳 Brunei Darussalam6.8%
🇲🇳 Mongolia6.6%
🇭🇷 Croatia6.6%
🇨🇾 Cyprus6.5%
🇵🇹 Portugal6.5%
🇵🇰 Pakistan6.4%
🇵🇾 Paraguay6.4%
🇸🇰 Slovak Republic6.2%
🇩🇴 Dominican Republic6.2%
🇨🇦 Canada5.9%
🇦🇿 Azerbaijan5.8%
🇸🇲 San Marino5.7%
🇧🇪 Belgium5.6%
🇷🇴 Romania5.5%
🇫🇯 Fiji5.5%
🇵🇭 Philippines5.4%
🇮🇩 Indonesia5.3%
🇩🇰 Denmark5.3%
🇱🇰 Sri Lanka5.0%
🇱🇺 Luxembourg5.0%
🇮🇪 Ireland4.8%
🇰🇿 Kazakhstan4.8%
🇬🇧 United Kingdom4.8%
🇧🇬 Bulgaria4.7%
🇦🇹 Austria4.6%
🇭🇳 Honduras4.6%
🇺🇸 U.S.4.6%
🇧🇭 Bahrain4.4%
🇷🇺 Russia4.3%
🇧🇾 Belarus4.3%
🇸🇮 Slovenia4.3%
🇲🇾 Malaysia4.3%
🇨🇳 China4.1%
🇮🇸 Iceland4.0%
🇧🇴 Bolivia4.0%
🇭🇰 Hong Kong SAR4.0%
🇳🇱 Netherlands3.9%
🇳🇿 New Zealand3.9%
🇭🇺 Hungary3.8%
🇳🇴 Norway3.8%
🇮🇱 Israel3.8%
🇪🇨 Ecuador3.8%
🇦🇺 Australia3.7%
🇲🇽 Mexico3.7%
🇹🇼 Taiwan 3.6%
🇲🇩 Moldova3.5%
🇰🇷 South Korea3.4%
🇩🇪 Germany3.4%
🇲🇹 Malta3.3%
🇵🇱 Poland3.2%
🇸🇨 Seychelles
3.0%
🇲🇴 Macao SAR2.7%
🇯🇵 Japan2.4%
🇨🇭 Switzerland2.4%
🇻🇳 Vietnam2.3%
🇨🇿 Czech Republic2.3%
🇸🇬 Singapore2.1%
🇹🇭 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 today’s labor market strength will ease as U.S. economic indicators weaken. One marker is the Conference Board’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. (It’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 47.4—a level of 48.7 and below generally indicates a recession—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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Markets

Mapped: The Growth in House Prices by Country

Global house prices were resilient in 2022, rising 6%. We compare nominal and real price growth by country as interest rates surged.

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The Growth in House Prices by Country

Mapped: The Growth in House Prices by Country

This was originally posted on Advisor Channel. Sign up to the free mailing list to get beautiful visualizations on financial markets that help advisors and their clients.

Global housing prices rose an average of 6% annually, between Q4 2021 and Q4 2022.

In real terms that take inflation into account, prices actually fell 2% for the first decline in 12 years. Despite a surge in interest rates and mortgage costs, housing markets were noticeably stable. Real prices remain 7% above pre-pandemic levels.

In this graphic, we show the change in residential property prices with data from the Bank for International Settlements (BIS).

The Growth in House Prices, Ranked

The following dataset from the BIS covers nominal and real house price growth across 58 countries and regions as of the fourth quarter of 2022:

Price Growth
Rank
Country /
Region
Nominal Year-over-Year
Change (%)
Real Year-over-Year
Change (%)
1🇹🇷 Türkiye167.951.0
2🇷🇸 Serbia23.17.0
3🇷🇺 Russia23.19.7
4🇲🇰 North Macedonia20.61.0
5🇮🇸 Iceland20.39.9
6🇭🇷 Croatia17.33.6
7🇪🇪 Estonia16.9-3.0
8🇮🇱 Israel16.811.0
9🇭🇺 Hungary16.5-5.1
10🇱🇹 Lithuania16.0-5.5
11🇸🇮 Slovenia15.44.2
12🇧🇬 Bulgaria13.4-3.2
13🇬🇷 Greece12.23.7
14🇵🇹 Portugal11.31.3
15🇬🇧 United Kingdom10.0-0.7
16🇸🇰 Slovak Republic9.7-4.8
17
🇦🇪 United Arab Emirates
9.62.9
18🇵🇱 Poland9.3-6.9
19🇱🇻 Latvia9.1-10.2
20🇸🇬 Singapore8.61.9
21🇮🇪 Ireland8.6-0.2
22🇨🇱 Chile8.2-3.0
23🇯🇵 Japan7.93.9
24🇲🇽 Mexico7.9-0.1
25🇵🇭 Philippines7.7-0.2
26🇺🇸 United States7.10.0
27🇨🇿 Czechia6.9-7.6
28🇷🇴 Romania6.7-7.5
29🇲🇹 Malta6.3-0.7
30🇨🇾 Cyprus6.3-2.9
31🇨🇴 Colombia6.3-5.6
32🇱🇺 Luxembourg5.6-0.5
33🇪🇸 Spain5.5-1.1
34🇨🇭 Switzerland5.42.4
35🇳🇱 Netherlands5.4-5.3
36🇦🇹 Austria5.2-4.8
37🇫🇷 France4.8-1.2
38🇧🇪 Belgium4.7-5.7
39🇹🇭 Thailand4.7-1.1
40🇿🇦 South Africa3.1-4.0
41🇮🇳 India2.8-3.1
42🇮🇹 Italy2.8-8.0
43🇳🇴 Norway2.6-3.8
44🇮🇩 Indonesia2.0-3.4
45🇵🇪 Peru1.5-6.3
46🇲🇾 Malaysia1.2-2.6
47🇰🇷 South Korea-0.1-5.0
48🇲🇦 Morocco-0.1-7.7
49🇧🇷 Brazil-0.1-5.8
50🇫🇮 Finland-2.3-10.2
51🇩🇰 Denmark-2.4-10.6
52🇦🇺 Australia-3.2-10.2
53🇩🇪 Germany-3.6-12.1
54🇸🇪 Sweden-3.7-13.7
55🇨🇳 China-3.7-5.4
56🇨🇦 Canada-3.8-9.8
57🇳🇿 New Zealand-10.4-16.5
58🇭🇰 Hong Kong SAR-13.5-15.1

Türkiye’s property prices jumped the highest globally, at nearly 168% amid soaring inflation.

Real estate demand has increased alongside declining interest rates. The government drastically cut interest rates from 19% in late 2021 to 8.5% to support a weakening economy.

Many European countries saw some of the highest price growth in nominal terms. A strong labor market and low interest rates pushed up prices, even as mortgage rates broadly doubled across the continent. For real price growth, most countries were in negative territory—notably Sweden, Germany, and Denmark.

Nominal U.S. housing prices grew just over 7%, while real price growth halted to 0%. Prices have remained elevated given the stubbornly low supply of inventory. In fact, residential prices remain 45% above pre-pandemic levels.

How Do Interest Rates Impact Property Markets?

Global house prices boomed during the pandemic as central banks cut interest rates to prop up economies.

Now, rates have returned to levels last seen before the Global Financial Crisis. On average, rates have increased four percentage points in many major economies. Roughly three-quarters of the countries in the BIS dataset witnessed negative year-over-year real house price growth as of the fourth quarter of 2022.

Interest rates have a large impact on property prices. Cross-country evidence shows that for every one percentage point increase in real interest rates, the growth rate of housing prices tends to fall by about two percentage points.

When Will Housing Prices Fall?

The rise in U.S. interest rates has been counteracted by homeowners being reluctant to sell so they can keep their low mortgage rates. As a result, it is keeping inventory low and prices high. Homeowners can’t sell and keep their low mortgage rates unless they meet strict conditions on a new property.

Additionally, several other factors impact price dynamics. Construction costs, income growth, labor shortages, and population growth all play a role.

With a strong labor market continuing through 2023, stable incomes may help stave off prices from falling. On the other hand, buyers with floating-rate mortgages face steeper costs and may be unable to afford new rates. This could increase housing supply in the market, potentially leading to lower prices.

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