• U.S. adds jobs but misses forecasts
• Read the Brookings report
• Read the Pew report

The global jobs crisis

Leaders of the G20 meeting in Cannes this week agreed global unemployment levels are "unacceptable." What do they plan to do about it? Strike a task force.

I believe they do understand that the world could be looking at a lost generation, but their final statement, while acknowledging the problem, failed to address it.

"We firmly believe that employment and social inclusion must be at the heart of our actions and policies to restore growth and confidence," the G20 statement released Friday said. "We therefore decide to set up a G20 task force which will work as a priority on youth employment."

An earlier draft version said this task force would "provide input" to a labour ministers' meeting next year. While unemployment levels are "unacceptable," so, too, is waiting until 2012.

In Canada, Friday's report on the labour market from Statistics Canada showed unemployment among youth inching up to 14.1 per cent in October. That's more than 400,000 young people who can't find work, and it's far, far worse in other countries.

As the International Labour Organization noted last month, there are more than 75 million young people without work around the globe.

"In the current context of economic instability, young men and women face increasing uncertainty in their hopes of finding a decent job," the ILO said. "... Political pressure to prevent the disheartening of a 'lost generation' is likely to increase over the short term and governments may be forced to shift priorities."

Canada's overall numbers showed a loss of 54,000 jobs in October, with the unemployment rate climbing back up to 7.3 per cent.

"Canada’s employment picture had been a surprising success story in 2011, at least up until this nasty result for October," said deputy chief economist Douglas Porter of BMO Nesbitt Burns.

"The pressing question now is whether this steep pullback represents a correction from that surprising strength, or the start of a new dismal trend? Given that the U.S. economy appears to be still plugging ahead, albeit gradually, we suspect the former. However, no question, this is an extremely loud warning shot for the economy."

• Canada sees biggest monthly job loss since 2009
• Stephen Gordon's Economy Lab: Headline jobs numbers don't tell the real story

Outlook grim

The economic outlook for the United States and Europe has been growing bleaker. This week, their central banks made it official.

In Washington, as it held its benchmark rate steady again, the Federal Reserve cut its outlook for growth and projected unemployment would remain at crisis levels.

Its statement Wednesday was certainly more optimistic than expected, the Fed saying that growth had strengthened in the third quarter. But it also warned it expected a "moderate pace of economic growth over coming quarters and consequently anticipates that the unemployment rate will decline only gradually."

The central bank also slashed its outlook for economic growth, now projecting 1.6 per cent to 1.7 per cent this year, 2.5 per cent to 2.9 per cent in 2012, and 3 per cent to 3.5 per cent in 2013.

A day later, Mario Draghi moved forcefully in his first week on the job as the new chief of the European Central Bank, cutting his benchmark rate by one-quarter of a percentage point while warning of a mild recession ahead.

Mr. Draghi has now undone half of the damage wrought by his predecessor, who hiked rates twice in the midst of the euro crisis in what many see as a policy error.

"The ECB’s surprise rate cut is certainly welcome amid a sharply weaker outlook for Europe, as the sovereign debt crisis continues to weigh on regional activity," said senior economist Benjamin Reitzes of BMO Nesbitt Burns.

"The incoming president might be making a statement with this unexpected move, perhaps signalling a change in tack by the historically hawkish central bank. Looking ahead, Draghi declined to comment on whether rates are 'appropriate,' responding that the ECB never pre-commits to any policy moves. This suggests that unless conditions improve meaningfully (doubtful), another rate cut is probable in December."

• Fed's inflation hawks return to the fold
• Dramatic debut for ECB chief

What the G20 didn't do

All in all, you'd have to agree that the leaders of the G20 held another summit in another lovely spot, this time on the Riviera, and managed to accomplish virtually nothing.

Their final statement, issued Friday, makes all the right noises, but in the end says little. They talk about co-operation and action plans and progress, but there's nothing new to make us all sleep well at night.

"Today, we reaffirm our commitment to work together and we have taken decisions to reinvigorate economic growth, create jobs, ensure financial stability, promote social inclusion and make globalization serve the needs of the people," said the statement released Friday.

It goes on like that. Some others:

"We have made progress in reforming the international monetary system to make it more representative, stable and resilient."

"We affirm our commitment to move more rapidly toward more market-determined exchange rate systems and enhace exchange rate flexibility ..."

"Recognizing that economic shocks affect disproportionately the most vulnerable, we commit to ensure a more inclusive and resilient growth."

"We reaffirm that the G20's founding spirit of bringing together the major economies on an equal footing to catalyze action is fundamental and therefore agree to put our collective political will behind our economic and financial agenda, and the reform and more effective working of relevant international institutions."

Leaders of the euro zone had hoped to possibly scrounge some money from the IMF, but no new funds were committed.

"As expected, the G20 summit concluded today without agreeing anything of substance," said Andrew Kenningham of Global Economics in London.

"Euro zone leaders were effectively told to get their own house in order, something they have conspicuously failed to do so far, and were given only very vague pledges of increased IMF support in future."

• Euro zone finds no new money for debt crisis at G20
• G20 leaders fail to agree on how to boost IMF
• Read the G20 statement
• G20's rescue ability weakens

The Greek tragedy

Shenanigans in Greece took up a lot of time and energy this week, and markets gyrated with the twists and turns. And there were many.

"Given that the world population hit 7 billion this week, roughly 1 out of every 620 people are now residents of Greece … and that one person is causing a lot of excitement for the rest of us 619," said Douglas Porter of BMO Nesbitt Burns. "If the implications of this week’s events were not so potentially serious, it would have made for great comedy."

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