Mapped: Unemployment Forecasts, by Country in 2023
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Mapped: Unemployment Forecasts, by Country in 2023



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 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 / Region 2023 Unemployment Rate(Projected)
🇿🇦 South Africa 35.6%
🇸🇩 Sudan 30.6%
🇵🇸 West Bank and Gaza 25.0%
🇬🇪 Georgia 19.5%
🇧🇦 Bosnia and Herzegovina 17.2%
🇦🇲 Armenia 15.1%
🇲🇰 North Macedonia 15.0%
🇨🇷 Costa Rica 13.2%
🇧🇸 The Bahamas 12.7%
🇪🇸 Spain 12.3%
🇬🇷 Greece 12.2%
🇨🇴 Colombia 11.1%
🇲🇦 Morocco 10.7%
🇸🇷 Suriname 10.6%
🇹🇷 Turkiye 10.5%
🇧🇧 Barbados 10.0%
🇦🇱 Albania 10.0%
🇵🇦 Panama 10.0%
🇷🇸 Serbia 9.7%
🇮🇷 Iran 9.6%
🇺🇿 Uzbekistan 9.5%
🇧🇷 Brazil 9.5%
🇮🇹 Italy 9.4%
🇰🇬 Kyrgyz Republic 9.0%
🇨🇻 Cabo Verde 8.5%
🇨🇱 Chile 8.3%
🇧🇿 Belize 8.0%
🇵🇷 Puerto Rico 7.9%
🇺🇾 Uruguay 7.9%
🇦🇼 Aruba 7.7%
🇫🇷 France 7.6%
🇵🇪 Peru 7.5%
🇸🇻 El Salvador 7.5%
🇸🇪 Sweden 7.4%
🇫🇮 Finland 7.4%
🇲🇺 Mauritius 7.4%
🇪🇬 Egypt 7.3%
🇱🇻 Latvia 7.2%
🇳🇮 Nicaragua 7.2%
🇱🇹 Lithuania 7.0%
🇦🇷 Argentina 6.9%
🇪🇪 Estonia 6.8%
🇧🇳 Brunei Darussalam 6.8%
🇲🇳 Mongolia 6.6%
🇭🇷 Croatia 6.6%
🇨🇾 Cyprus 6.5%
🇵🇹 Portugal 6.5%
🇵🇰 Pakistan 6.4%
🇵🇾 Paraguay 6.4%
🇸🇰 Slovak Republic 6.2%
🇩🇴 Dominican Republic 6.2%
🇨🇦 Canada 5.9%
🇦🇿 Azerbaijan 5.8%
🇸🇲 San Marino 5.7%
🇧🇪 Belgium 5.6%
🇷🇴 Romania 5.5%
🇫🇯 Fiji 5.5%
🇵🇭 Philippines 5.4%
🇮🇩 Indonesia 5.3%
🇩🇰 Denmark 5.3%
🇱🇰 Sri Lanka 5.0%
🇱🇺 Luxembourg 5.0%
🇮🇪 Ireland 4.8%
🇰🇿 Kazakhstan 4.8%
🇬🇧 United Kingdom 4.8%
🇧🇬 Bulgaria 4.7%
🇦🇹 Austria 4.6%
🇭🇳 Honduras 4.6%
🇺🇸 U.S. 4.6%
🇧🇭 Bahrain 4.4%
🇷🇺 Russia 4.3%
🇧🇾 Belarus 4.3%
🇸🇮 Slovenia 4.3%
🇲🇾 Malaysia 4.3%
🇨🇳 China 4.1%
🇮🇸 Iceland 4.0%
🇧🇴 Bolivia 4.0%
🇭🇰 Hong Kong SAR 4.0%
🇳🇱 Netherlands 3.9%
🇳🇿 New Zealand 3.9%
🇭🇺 Hungary 3.8%
🇳🇴 Norway 3.8%
🇮🇱 Israel 3.8%
🇪🇨 Ecuador 3.8%
🇦🇺 Australia 3.7%
🇲🇽 Mexico 3.7%
🇹🇼 Taiwan 3.6%
🇲🇩 Moldova 3.5%
🇰🇷 South Korea 3.4%
🇩🇪 Germany 3.4%
🇲🇹 Malta 3.3%
🇵🇱 Poland 3.2%
🇸🇨 Seychelles
🇲🇴 Macao SAR 2.7%
🇯🇵 Japan 2.4%
🇨🇭 Switzerland 2.4%
🇻🇳 Vietnam 2.3%
🇨🇿 Czech Republic 2.3%
🇸🇬 Singapore 2.1%
🇹🇭 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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Timeline: The Shocking Collapse of Silicon Valley Bank

Silicon Valley Bank was shuttered by regulators becoming the largest bank to fail since the height of the Financial Crisis. What happened?



Timeline: The Shocking Collapse of Silicon Valley Bank

Just days ago, Silicon Valley Bank (SVB) was still viewed as a highly-respected player in the tech space, counting thousands of U.S. venture capital-backed startups as its customers.

But fast forward to the end of last week, and SVB was shuttered by regulators after a panic-induced bank run.

So, how exactly did this happen? We dig in below.

Road to a Bank Run

SVB and its customers generally thrived during the low interest rate era, but as rates rose, SVB found itself more exposed to risk than a typical bank. Even so, at the end of 2022, the bank’s balance sheet showed no cause for alarm.

Summary of the SVB balance sheet at the end of 2022

As well, the bank was viewed positively in a number of places. Most Wall Street analyst ratings were overwhelmingly positive on the bank’s stock, and Forbes had just added the bank to its Financial All-Stars list .

Outward signs of trouble emerged on Wednesday, March 8th, when SVB surprised investors with news that the bank needed to raise more than $2 billion to shore up its balance sheet.

The reaction from prominent venture capitalists was not positive, with Coatue Management, Union Square Ventures, and Peter Thiel’s Founders Fund moving to limit exposure to the 40-year-old bank. The influence of these firms is believed to have added fuel to the fire, and a bank run ensued.

Also influencing decision making was the fact that SVB had the highest percentage of uninsured domestic deposits of all big banks. These totaled nearly $152 billion, or about 97% of all deposits.

ℹ️ The Federal Deposit Insurance Corporation (FDIC) insures up to $250,000 per account, per bank, for depositors.

By the end of the day, customers had tried to withdraw $42 billion in deposits.

What Triggered the SVB Collapse?

While the collapse of SVB took place over the course of 44 hours, its roots trace back to the early pandemic years.

In 2021, U.S. venture capital-backed companies raised a record $330 billion —double the amount seen in 2020. At the time, interest rates were at rock-bottom levels to help buoy the economy.

Matt Levine sums up the situation well: “When interest rates are low everywhere, a dollar in 20 years is about as good as a dollar today, so a startup whose business model is “we will lose money for a decade building artificial intelligence, and then rake in lots of money in the far future” sounds pretty good. When interest rates are higher, a dollar today is better than a dollar tomorrow, so investors want cash flows. When interest rates were low for a long time, and suddenly become high, all the money that was rushing to your customers is suddenly cut off.”

Year U.S. Venture Capital Activity Annual % Change
2021 $330B 98%
2020 $167B 15%
2019 $145B 1%
2018 $144B 64%
2017 $88B 6%
2016 $83B -3%

Source: Pitchbook

Why is this important? During this time, SVB received billions of dollars from these venture-backed clients. In one year alone, their deposits increased 100%. They took these funds and invested them in longer-term bonds. As a result, this created a dangerous trap as the company expected rates would remain low.

During this time, SVB invested in bonds at the top of the market. As interest rates rose higher and bond prices declined, SVB started taking major losses on their long-term bond holdings.

Losses Fueling a Liquidity Crunch

When SVB reported its fourth quarter results in early 2023, Moody’s Investor Service, a credit rating agency took notice . In early March, it said that SVB was at high risk for a downgrade due to its significant unrealized losses.

In response, SVB looked to sell $2 billion of its investments at a loss to help boost liquidity for its struggling balance sheet. Soon, more hedge funds and venture investors realized SVB could be on thin ice. Depositors withdrew funds in droves, spurring a liquidity squeeze and prompting California regulators and the FDIC to step in and shut down the bank.

What Happens Now?

While much of SVB’s activity was focused on the tech sector, the bank’s shocking collapse has rattled a financial sector that is already on edge.

The four biggest U.S. banks lost a combined $52 billion the day before the SVB collapse. On Friday, other banking stocks saw double-digit drops, including Signature Bank (-23%), First Republic (-15%), and Silvergate Capital (-11%).

Name Stock Price Change, March 10 2023 Unrealized Losses / Tangible Equity
SVB Financial -60%* -99%
First Republic Bank -15% -29%
Zions Bancorp -2% -47%
Comerica -5% -47%
U.S. Bancorp -4% -55%
Fifth Third Bancorp -4% -38%
Bank of America -1% -54%
Wells Fargo 1% -33%
JPMorgan -1% -21%

Source: Morningstar Direct. *Represents March 9 data, trading halted on March 10.

When the dust settles, it’s hard to predict the ripple effects that will emerge from this dramatic event. For investors, the Secretary of the Treasury Janet Yellen announced confidence in the banking system remaining resilient, noting that regulators have the proper tools in response to the issue.

But others have seen trouble brewing as far back as 2020 (or earlier) when commercial banking assets were skyrocketing and banks were buying bonds when rates were low.

The whole sector is in crisis, and the banks and investors that support these assets are going to have to figure out what to do. -Christopher Whalen, The Institutional Risk Analyst

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