Faster than anticipated drop in Europe jobless rate points to reform success

Frankfurt

EUROPEAN Central Bank (ECB) researchers have some welcome news for euro-area job seekers: Okun is back.

A drop in unemployment from a record high of 12.1 per cent in early 2013 to 10.1 per cent in April this year was faster than economists and policymakers anticipated, and the link between gross domestic product and employment seems now to be as strong as it was before 2008. Previous research had shown that the relationship - known as Okun's Law after the economist Arthur Okun who proposed it in 1962 - weakened during the financial crisis.