12.10.2009.

Although a slowdown in the rise of unemployment can be expected in the next few months, it is premature to talk about stabilization of the labour market

The increase in registered unemployment, at 0.9 percentage points, was the steepest in the last six months and, by the end of the month, reached 13.2% of the economically active population. The rapid rise in unemployment was determined by seasonal factors, a greater motivation of job-seekers to register at the State Employment Office, and the previously adopted decisions on cutting the number of jobs. Changes in the macroeconomic situation cannot be considered an important factor in the September rise in unemployment: quite the contrary - an increasing number of macroeconomic indicators point to signs of economic recovery.

The increase in registered unemployment in September was determined by an increase in the number of those who had acquired the unemployed status; the number of those who had lost that status was on a par with the previous months.  5.3 thousand among the unemployed found employment: an increase of 1.5 times over August.

The increase in the number of people who have acquired the unemployed status is related both to the end of seasonal jobs and to the influence of the reduction of the number of teachers. (As of the beginning of the new school year, 1.7 thousand teachers in the active age have been laid off, which translates into 0.15 percentage points of total unemployment.)

The number of people who have lost their unemployed status was similar to the indicators of the previous three months, even though unemployment was on the rise. As of July 2009, the term of unemployment benefits was increased to nine months for all the registered unemployed persons irrespective of the length of service. Moreover, September saw the launch of the project sponsored by the State Employment Agency and European Special Fund that offers the registered unemployed persons who have not received unemployment benefits to become involved in practical work for the local governments. As a result, job seekers now have considerably greater motivation to maintain their unemployed status even after the period for receiving unemployment benefits has expired.

It is expected, that in October the rate of increase of registered unemployment will not be substantially slower over the 0.9 percentage points registered in September. It would be premature to talk about stabilization of the unemployment rate. The dynamics of the unemployment rate usually lags behind the changes in economic activity and for that reason, decreased unemployment can be expected only after economic growth has recommenced.

Data from an opinion poll conducted among businessmen indicate that in the next few months the employment rate will continue to drop, albeit slower than up to now.  An opinion poll taken by the European Commission among the private sector businessmen indicates that the outlook of employers on planned changes in employee numbers continued to improve in construction and services (except sales).  The expectations of businessmen active in sales and industry deteriorated  somewhat in September after a more positive outlook in the preceding months.

The outlook of employees on the labour market has become more optimistic: according to the European Commission poll, the number of those who expected unemployment to be on the rise over the next twelve months had shrunk somewhat.

APA: Krasnopjorovs, O. (2019, 15. sep.). Although a slowdown in the rise of unemployment can be expected in the next few months, it is premature to talk about stabilization of the labour market. Taken from https://www.macroeconomics.lv/node/2525
MLA: Krasnopjorovs, Oļegs. "Although a slowdown in the rise of unemployment can be expected in the next few months, it is premature to talk about stabilization of the labour market" www.macroeconomics.lv. Tīmeklis. 15.09.2019. <https://www.macroeconomics.lv/node/2525>.

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