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Charts of the week: mind the widening gap between the euro area and the UK/US

We show how the euro area (EA) is lagging behind its two major advanced economy counterparts in a few key macroeconomic variables. 

By: , , and Date: April 29, 2014 Topic: European Macroeconomics & Governance

In these charts of the week we show how the euro area (EA) is lagging behind its two major advanced economy counterparts in a few key macroeconomic variables. Without blaming responsibility or drawing causality from any particular policy measure, these simple metrics only intend to show the relative under-performance of the EA vis-à-vis the UK and US. The data range from 1999 to the first quarter of 2014.

Select an indicator from the list and hover the chart below to see individual datapoints.

Sources: Eurostat, FED, OECD

From the selected variables only employment (measured as total number of employed persons) seems to over-perform in the EA when indexed to 1999=100, but when looking at the unemployment rate the EA had a much looser labour market (and higher structural unemployment) than the US and the UK back in 1999. This gave the euro area much more leeway for employment growth before the crisis struck. The employment picture looks much less positive for the EA when focusing on the post crisis period; in the UK the total employed population surpassed the pre-crisis peak during the second half of 2012, the US is headed to exceed its pre-crisis employment peak this year, while the EA is far away from that, coping with the highest unemployment rates it has seen since the introduction of the single currency


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