My boss asked an interesting question the other day.

I know the U.S. isn’t doing great,” he said. “But how are we doing compared to the rest of the world? What’s our unemployment rate compared to Europe’s?”

I wasn’t sure how well I could answer. For one thing, the U.S. publishes five unemployment rates, each with a different definition. You could say our unemployment rate is 10.7%, or you could just as legitimately say it’s 6.1%. The question is which of the five measures correlates with how European countries calculate unemployment.

Fortunately, the BLS does a running comparison of the U.S. and nine other nations. Between 1960-2007, our unemployment rate was roughly in the middle, as this chart shows:

Source: BLS

But how about now? As recently as the beginning of 2006, we were flying high in third, trailing only Japan and the Netherlands. Germany, traditionally better off than the U.S., was at 11%, more than double our 4.7%.

But we’ve been slowing down, and the others have been speeding up. Our rate has gone up 1.4%, and the others have gone down an average of 1.2%, dropping us into 7th place.
Source: BLS

The good news? Our 7th-place ranking is probably temporary. The others are slowing down now, too. Chances are, we’ll start improving again long before they do. But for now, as our trading partners start to slump, our prospects for exports aren’t good, which is a major reason GDP will suffer during 2008 and 2009.
In our weekly “Ask the Economist” feature, our resident Economist, Mike Donnelly, will be tackling your questions about the economy. If you’ve got a question — and no topic is too big or small — you’d like him to field, e-mail us at economist@pbp.com or leave your queries in the comments section.

Tags: BLS, Economy, Europe, GDP, Unemployment rate