Unemployment decline accelerated in Q3
• Unemployment rate down to 7%
• Employment up by 1.9% annually
• Number of economically active up by 0.2% annually
• Labour shortages remain elevated
Ongoing economic expansion continues driving demand for labour.
Labour market conditions tightened further in the third quarter, with the unemployment rate falling to 7% down from 7.7% in the previous quarter and 8.5% in the third quarter of last year. Although, the unemployment rate is already past its 10 year low, the annual decline in the number of unemployed accelerated to 18.2% (around 12% in previous quarters), partly helped by unusually warm weather.
The fall in unemployment was attributed to strong job creation.
The number of employed increased by 1.9% compared to the same period last year. The largest employment gains were seen by the age groups of 35-44 and 55-64. The latter goes hand in hand with a gradual increase in the retirement age and the phenomenon of ageing society.
Strong labour market continued pulling people off the job market sidelines.
The number of economically active inched up for the fourth quarter in a row despite shrinking working age population. The labour market participation rate shot up to an all-time high of 70.1%. Although population aged 15-74 continued shrinking, the pace of decline lost some steam, in the third quarter recording its slowest decline in 11 years (-0.7% year-on-year).
Labour market slack is drying up, lifting wages.
The number of free job posts is increasing rapidly, while the number of unemployed per vacancy is heading down. With labour shortage getting more pronounced and population decline still in cards, the participation rate does not have much more to give. Hence, the employment growth is going to fade. With economy still growing, the unemployment rate is to decline further, but given the already low level the pace of decline will slow. Further tightening of the job market, will continue exerting upward pressure on wages.
For more information please contact Ms. Agnese Buceniece, +371 67445875, firstname.lastname@example.org
This email is sent through the web-based distribution system of Swedbank Macro Research. As a subscriber you can change your settings regarding what publications you will receive by clicking “Change your settings”. You can also unsubscribe from this particular newsletter by clicking "Unsubscribe". Information on the Swedbank Principles of processing personal data can be found here.