Czech unemployment up to 3.1%, first increase in four months

Czech unemployment up to 3.1%, first increase in four months
Czech unemployment ticks up to 3.1% in Dec, first increase in four months
By bne IntelliNews January 10, 2019

Unemployment in the Czech Republic increased to 3.1% in December from 2.8% in November after four months of stagnation or declines, down by 0.7 percentage points year-on-year, according to the data by the Czech Labour Office published on January 9.

“The trend of increasing employment has not changed; at the end of the last year there were over three quarters of total number of persons in productive age working,” said Director of Labour Market and Equal Opportunities Department of the Czech Statistical Office Dalibor Holy.

There were more than 231,500 jobless people, the lowest value since 1996, increase by 16,500 month-on-month and decrease by 49,000 y/y. The number of vacant jobs increased by 900 to more than 324,400 m/m, by 108,000 y/y which represents 50% annual growth.

The lowest unemployment rate was recorded in Prague region 1.9%, the highest figure then in the Moravian-Silesian region 4.7%.

In December, employers were interested in construction workers, manufacture assistants, cleaners and hotel assistants, truck drivers and fork-lift trucks drivers, and warehousers. There was also a great demand for technical professions across all disciplines.

According to analysts, the unemployment rate is a temporary seasonal phenomenon. Unemployment will remain low as the labour market remains a barrier to the economic growth. “Slowdown in economic growth should lead to less stagnation of unemployment this year. Actual monthly values will of course be affected by seasonal factors. In January, we can expect another slight increase in unemployment share,” said Deloitte Chief Economist David Marek.

The Ministry of Finance expects a further decrease to 2.8% in 2019 as it assumes that “solid wage growth can motivate some people to move from the grey economy to the official labour market. Lack of suitable workforce has become an increasing barrier to further economic growth over the last two years, and in the past year, it has become the most prominent barrier to further growth,” said ING Chief Economist Jakub Seidler.