Download Unit Labour Cost

Two Continents Compared
Jean-Claude Trichet
President of the European Central Bank
Frankfurt am Main, 10 June 2011
Std. deviation of annual CPI inflation
Macroeconomic Volatility
2.0
EA 99-07
US 99-07
JP 99-07
UK 99-07
1.5
EA 99-10
US 99-10
JP 99-10
UK 99-10
1.0
0.5
0.0
0.0
1.0
2.0
Std. deviation of real GDP growth
3.0
Sources: OECD, ECB calculations
2
Inflation Expectations
Euro area
United States
5-year BEIR
10-year BEIR
5-year forward 5 years ahead BEIR
5-year BEIR
10-year BEIR
5-year forward 5 years ahead BEIR
4.0
4.0
3.0
3.0
2.0
2.0
1.0
1.0
0.0
0.0
-1.0
-1.0
-2.0
-2.0
Jul08
Jan09
Jul09
Jan10
Jul10
Jan11
Jul11
Jul08
Jan09
Jul09
Jan10
Jul10
Jan11
Jul11
Sources: US Bureau of Labor Statistics, Eurostat, ECB calculations
Note: BEIR is Break-Even Inflation Rate from comparison of inflation-indexed and conventional sovereign bonds.
3
Real GDP per Capita
1999Q1 = 100
120
Euro area
US
115
110
105
100
95
90
85
95
97
99
01
03
05
07
09
11
Sources: US Bureau of Economic Analsyis, Eurostat, ECB calculations
Note: Output per capita is real GDP divided by total population
4
Dispersion of Annual Inflation
Unweighted standard deviation in percentage points
3
Euro Area (12 countries)
US (14 MSAs)
2
1
0
1995
1997
1999
2001
2003
2005
2007
2009
2011
Sources: Eurostat, US Bureau of Labor Statistics, ECB calculations
Note: MSAs: Metropolitan Statistical Areas
5
Dispersion of Real GDP Growth
Unweighted standard deviation in percentage points
4.0
Euro area (12 countries)
3.5
US (50 States & D. Columbia)
3.0
2.5
2.0
1.5
1.0
0.5
0.0
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
Sources: European Commission, US Bureau of Economic Analysis, ECB calculations
Note: There is a statistical break in the US regional data in 1998. For the US States the data refer to Gross Domestic Product (GDP) by state.
6
Dispersion of Unit Labour Cost
Unweighted standard deviation in percentage points
9
Euro area 12
8
United States
7
6
5
4
3
2
1
0
1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Sources: European Commission, US Bureau of Labor Statistics and US Bureau of Economic Analysis
7
ULC Dynamics in the Euro Area
ULC relative to euro area average, 1998=100
125
120
Belgium
Spain
Netherlands
Germany
France
Austria
Ireland
Italy
Portugal
Greece
Luxembourg
Finland
115
110
105
100
95
90
85
80
75
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Source: European Commission
Note: ULCs are computed as the ratio between compensation per employee and real GDP per employed person
8
ULC Dynamics in the United States
ULC relative to US national, 1998=100
125
120
Oregon
California
Arizona
Alaska
Kentucky
Florida
Ohio
Louisiana
Nevada
Michigan
Idaho
115
110
105
100
95
90
85
80
75
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Source: US Bureau of Economic Analysis
Note: ULCs are computed as the ratio between compensation per nonfarm employee and real GDP per employed person.
9