. Employment conditions
Private consumption growth will also be influenced by employment conditions, with an
improvement in (deterioration of) employment conditions leading to higher (lower) private
consumption growth than predicted by other factors.
Table 4 shows data on unemployment rates in 2002 and 2007 and the change in the
unemployment rate during the 2002–2007 period in the G7 countries. As can be seen from
this table, employment conditions improved in most G7 countries during the 2002–2007
period, with unemployment rates declining by 2.6 percentage points in Italy, 1.7 percentage
points in Canada, 1.6 percentage points in Japan, and 1.2 percentage points in the United
States, not changing at all in Germany, and increasing by 0.1 percentage points in France
and 0.2 percentage points in the United Kingdom during the 2002–2007 period.
A comparison of column (3) of Table 1 and column (3) of Table 4 shows that there is
little correlation between private consumption growth rates and changes in unemployment
rates. The fact that Canada showed the second largest improvement in unemployment rates
(1.7 percentage points) as well as the highest growth rate of private consumption (3.74
percent) during the 2002–2007 period suggests that there is a positive correlation between
the two, but the fact that Italy showed by far the largest improvement in unemployment
rates (2.6 percentage points) even though it showed the second lowest growth rate of private
consumption (1.05 percent), whereas the United Kingdom was one of only two countries
showing a deterioration in their unemployment rates (by 0.2 percentage points) even though
it showed the third highest growth rate of private consumption (2.44 percent) suggests that
there is a negative correlation between the two.
Japan ranked third with respect to the improvement in unemployment rates (a decline of
1.6 percentage points) but only fifth with respect to the growth rate of private consumption
(1.30 percent), suggesting that the improvement in employment conditions did not do much
to boost private consumption growth in Japan.