Key Economic & Labor Market Metrics Explained

Understanding Key Macroeconomic Balances

National Accounts & Economic Identities

• Current Account Balance + Capital Account Balance = Net lending (+) / Net borrowing (–)
• CAB + Capital Account Balance = Financial Account Balance – Errors and omissions
• Gross Domestic Product at market prices (GDPmp) = Final Consumption Expenditure (FCE) + Gross Fixed Capital Formation (GFCF) + Exports (X) – Imports (M)
• Gross National Income (GNI) = GDPmp + Net Primary Income with RoW (NPI)
• Gross National Disposable Income (GNDI) = GNI + Net Secondary Income with RoW* (NSI)
• * net current transfers with RoW
• GNDI = GDPmp + NPI + NSI
• GNDI = FCE + GFCF + X – M + NPI + NSI
• X – M + NPI + NSI = Current Account Balance
• Domestic Demand = FCE + GFCF
• GNDI – Domestic Demand = Current Account Balance

Interpreting Current Account Balances

A negative balance of the Current Account implies that Domestic Demand is higher than Disposable Income. If income is greater than absorption (domestic demand), there is a surplus in the Current Account. Conversely, if absorption is greater than income, there is a deficit in the Current Account.

A positive Current Account Balance implies that current saving is greater than gross fixed investment. A negative balance implies that current savings are not enough to cover the capital accumulation process of the economy.

Labor Market Indicators & Employment Data

Beyond the Standard Unemployment Rate

These indicators provide a more comprehensive view of the labor market:

• Underemployed part-time workers are persons aged 15-74 working part-time who wish to work additional hours and are available to do so. Part-time work is recorded as self-reported by individuals.
• Persons available to work but not seeking are persons aged 15-74 neither employed nor unemployed who want to work, are available for work in the next 2 weeks but are not actively seeking work.
• Persons seeking work but not immediately available are the sum of persons aged 15-74 neither employed nor unemployed who are actively seeking work during the last 4 weeks but are not available for work in the next 2 weeks.

Core Labor Force Definitions

• Employed people = wage earners + non-wage earners
• Labour force (active population) = employed + unemployed
• Δ Labour force = Δ employment + Δ unemployment
• Population of 16 years and over = active population + economically inactive persons.
• Participation rate (activity rate) = ratio between the labour force and the population of 16 years and over.
• Rate of employment = ratio between employed people and the population of 16 years and over.

Labor Costs and Earnings Statistics

Key Concepts in Labor Cost Measurement

• Labour cost or total labour cost is the total expenditure borne by employers for employing staff. There can be direct costs (gross wages in cash or kind) or indirect costs (employers' social contributions, recruitment costs, etc.). The Labour Cost Survey is a four-yearly survey that collects levels of labour costs at a very detailed level.
• The quarterly labour cost index is harmonized at the EU level. It measures the cost pressure arising from the labour production factor.
• Annual average gross earnings are the basis for the calculation of several other indicators such as annual net earnings. This represents the workers' earnings after deductions.