unemployment

The labour survey data of the Central Statistical Bureau (CSB) point to a further recovery of the Latvian labour market, which is reflected not only in dropping unemployment but also in increased employment.

The labour survey data published by the Central Statistical Department today confirm that any worries that unemployment may not be shrinking are unfounded. The percentage of jobseekers in the third quarter of 2012 was 13.5% of the economically active population, which is the lowest indicator since the end of 2008.

The registered unemployment rate is continuing to drop gradually (to 11.0% of the economically active population at the end of September 2012), albeit slightly slower than in the respective period of the last year. Lower unemployment implies also a reduced cyclical component of unemployment that slows down the subsequent reduction in unemployment. The number of unemployed registered with the State Employment Agency (SEA) (108.3 thousand) is the lowest in 3.5 years and a few thousand lower than at the beginning of 1999, when a wave of layoffs followed the Russian crisis. 

The labour survey data for the second quarter of 2012 suggest that employment has grown along with high economic activity. At the same time the unemployment rate has also remained high. It has resulted from an increase in the economic activity promoted by the economic growth and new job opportunities as well as by the implemented national employment policy. Such developments should be treated positively; nevertheless, they raise the unemployment rate.

Under the influence of seasonal factors, unemployment level continued to drop in June (by 0.4 percentage points, to 11.9% of the economically active population). The number of unemployed (117606) was the lowest since Spring of 2009, reflecting the sustained rise in gross domestic product. Even though filling the seasonal vacancies at the beginning of the summer slightly reduced the total number of vacancies, the number of unemployed to one vacancy (28) was still the lowest in the last three-and-a-half years.

This year the International Children's Day (1 June) was marred by media headlines dedicated to soaring youth unemployment rates almost everywhere in the world. However, the situation with the youngsters' position in the labour market is much less clear than it seems at first glance. What lies behind the dismal unemployment numbers?

Two useful figures for the politicians' portfolio

The dismal unemployment headlines rely on two figures that form a common base for the youth unemployment debate.

After the usual slight rise at the beginning of the year caused by seasonal factors, in March unemployment once again dropped (by 0.1 pp., to 11.7% of the economically active population). At least during the next six months, the number of the unemployed is expected to go down, with the level of registered unemployment approaching a one-digit figure.  

Unemployment is dropping for the seventh consecutive quarter. Jobseekers rate in the fourth quarter of 2011 fell by 0.1 percentage point (to 14.3% of the economically active population), i.e. at a slower rate than before. This slower rate is related to the restructuring of the temporary jobs programme and the traditionally lower employment during the winter season. In December, with the completion of stage one of the temporary jobs or "100-lats" programme, no one took part in it.

Registered unemployment rate has stabilized since mid-October and at the end of 2011 was 11.5% of economically active population.