ILO Report Predicts 2024 Global Unemployment Rate Rise to 5.2%

Summary

  • The ILO projects the global unemployment rate will increase to 5.2% by 2024 from 5.1% in 2023, adding two million more people to the unemployed.
  • A slump in labor market performance is anticipated due to worldwide decelerating growth.
  • The UN agency ILO reports a swift return to the previous decade’s slow labor productivity growth rates following a brief post-pandemic rebound.
  • Unemployment is most concerning in high-income countries, with negative employment growth predicted for 2024 and minimal improvements forecast for 2025.
  • Low-income and lower-middle-income countries are expected to see robust job gains, while little advancement is forecast in upper-middle-income nations over the next two years.

Global Unemployment Forecast

According to the International Labour Organisation’s (ILO) 2024 World Employment and Social Outlook report, there will be a significant increase in global unemployment. An additional two million people are expected to become unemployed, raising the global unemployment rate from 5.1% in 2023 to 5.2% in 2024.

Labour Market Performance Slump

Richard Samans, director of ILO’s research department, points towards a decline in labor markets due to the decelerating growth worldwide. He mentioned, “We foresee a modest decline in labour market performance.”

Labour Productivity Stagnation

The UN-affiliated ILO also reported a swift return to low labor productivity following a short recovery period post-pandemic. The rate at which aggregate labor productivity has grown over the previous decade has quickly re-emerged.

Income and Wages Vulnerabilities

The ILO report warns about the vulnerability of real wages and disposable income during periods of slow productivity growth, particularly during sudden price shocks.

Employment Projections for Varying Income Countries

According to the report, robust job gains will continue in low-income and lower-middle-income countries. Meanwhile, high-income countries face concerning employment trends, with the employment growth estimated to go into negative territory in 2024 and slight improvements expected in 2025.

Lastly, the expected global unemployment surge and income vulnerabilities could impact forex and potentially influence the trading strategies of specific assets, given the anticipated effects on economic growth and inflation rates.

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