The International Labour Organization (ILO) has updated its forecast for global unemployment, predicting a slight decrease from 5.0% in 2023 to 4.9% in 2024. This revision contrasts with the organization’s earlier January estimate, which anticipated an increase to 5.2%, driven by expected economic slowdowns in advanced economies.
Economic Resilience in Key Markets
The adjusted forecast reflects stronger-than-anticipated labor market performance in China, India, and various high-income countries. Richard de Chazal, a macro analyst at investment banking group William Blair, explained, “China’s growth wasn’t as weak as expected last year, as authorities managed to sustain momentum longer than anticipated.”
In the early months of 2024, global economic growth has outperformed expectations, particularly in the United States, where easing inflation has provided relief to household incomes. De Chazal noted, “The impact of higher interest rates has been mitigated as both corporate and household sectors secured lower rates, showing less sensitivity to the Federal Reserve’s tightening measures.”
Improved Economic Forecasts
The International Monetary Fund (IMF) has also revised its outlook, increasing its 2024 global growth forecast to 3.2%, up from the 3.1% estimated in January, largely due to an improved U.S. economic outlook. This stabilization has contributed to a relatively stable labor market outlook globally.
Persistent Employment Gaps
Despite the positive near-term projections, the ILO highlights ongoing challenges, particularly the persistent lack of employment opportunities. The organization estimates that the jobs gap, which includes those without a job but seeking work, will rise slightly to 402 million people in 2024, up from 399 million the previous year.
The labor market remains notably uneven, especially for women. ILO Director-General Gilbert F. Houngbo commented, “The labor market continues to be an uneven playing field.” In low-income countries, the jobs gap for women stands at 22.8%, compared to 15.3% for men. In high-income countries, the disparity is narrower but still significant, with rates of 9.7% for women and 7.3% for men.
Looking Ahead
While the global unemployment rate is expected to stabilize at 4.9% through 2025, the ILO warns that the medium-term outlook remains uncertain due to potential impacts from upcoming monetary and fiscal policy adjustments worldwide. These policies may have delayed effects on labor markets, necessitating continued efforts to create a more equitable and resilient employment landscape.
photo source: Google
By: Montel Kamau
Serrari Financial Analyst
30th May, 2024
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