Labour markets at a crossroads: softening trends amid elevated uncertainty

Key takeaways

• Labour market conditions in emerging market economies remain broadly stable, but unemployment in several advanced economies is edging up, and forward-looking indicators point to further weakening. 
• Cyclical forces partly explain these developments, but longer-term structural forces are also at play, including deregulation and demographic pressures (ageing, migration, participation of older workers).
• Weaker labour markets may weigh on output, especially in the absence of productivity gains. In some emerging market economies, tighter conditions and stronger wage-price pass-through could raise the risk of de-anchoring inflation expectations.

The views expressed in this publication are those of the authors and not necessarily those of the BIS.