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European measures applied to mitigate the effects of the pandemic have contained the unemployment rate in Europe more than in the U.S. While recognizing economic risks from the rising number of COVID-19 cases in the U.S., our forecast sees this success ratio reversing before the end of the year.
U.S. and European labor markets have displayed strikingly different performance during the crisis. From February to April, the Euro area unemployment rate rose only 10 basis points (bps) to 7.3%, while the U.S. rate (U3) rose 1,120 bps to 14.7% (Figure 1). Since then, the gap