Lavia: Labour market gets first coronavirus’ chills in Q1
- Labour market weakened, unemployment rate up to 7.4% in Q1
- Wage growth moderated to 6.6% y/y in Q1, led by the private sector
- Weaker developments expected in Q2
Although the virus containment measures were in force for just a couple of weeks, labour market indicators already showed weakness in Q1. The full extent of the corona-induced shock will be visible in Q2.
The unemployment rate increased to 7.4% in Q1 (6.9% a year ago), and it is expected to peak in autumn, averaging at 9.5% in 2020.
Wage growth remained rather strong in Q1, at 6.6% y/y, which was only a tad slower than in Q4 (6.9% y/y). In April, companies reported that labour shortages were not a worry anymore, making wage cuts more likely in Q2. We forecast the wage growth will stall this year.
Labour market weakened, wage growth moderated in Q1, but that’s only the tip of the iceberg
For more information please contact Ms. Agnese Buceniece, +371 67445875, email@example.com
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