Consumption recovery threatened by unemployment

In 2009 the number of full-time unemployed exploded by 88 per cent to 96,500 persons from 51,300 in 2008. However, the number in 2009 is still lower than in 2007 before the financial crisis. The risk is, though, that the unemployment could curb a possible consumption recovery, chief economist Helge J. Pedersen, Nordea, wrote.

And it is primarily men who have been affected by unemployment. The reason is that the majority of the unemployed are workmen in the struggling construction sector, and as it is mainly the male part of the population which is employed as workmen, the distribution of unemployment is somewhat biased.

The bias becomes obvious when looking at the number of people affected by unemployment – i.e. not long-term unemployed but people who were in 2009 briefly affected by unemployment. Of these 217,000 were men and 163,000 women.

There is no immediate signs of brighter times, and the number of full-time unemployed will probably increase this year.
»The figures show clearly that the unemployment is spreading to many Danish families. And as we shall most likely see an increase in the number of full-time unemployed this year to about 150,000, indications are that up to half a million Danes may be affected by unemployment during the year. This corresponds to about 17 per cent of the labour force,« Helge J. Pedersen wrote.

The risk of unemployment could thus curb the consumption recovery hoped for as a result of tax reliefs and low interest rates. Direkt/BNS