The Central Bureau of Statistics today published contradictory unemployment figures for July, which fail to shed light on the labor market, one of the most important macroeconomic factors.
According to original data, the unemployment rate rose from 5.9% in June 2013 to 6.7% in July, an 14.5% increase of in the number of unemployed by more than 31,000 to 248,000. However, seasonally-adjusted data for July show the exact opposite: a drop in the unemployment from 6.7% in June to 6.3% in July, a reduction in the number of unemployed by 15,000 persons.
In April-June, both original and seasonally-adjusted unemployment figures correlated, showing a decline in the unemployment rate. The correlation broke down in July, as it did in July 2012.
"The seasonally-adjusted data, which we normally look at, are problematic because the Central Bureau of Statistics changed its methodology," says Psagot Investment House Ltd. macroeconomic analyst Ori Greenfeld. "Seasonally-adjusted data are designed to neutralize non-economic effects. To do this, you need a timeline that is long enough to provide a historic perspective that makes it possible to accurately obtain seasonal factors."
Earlier this year, the Central Bureau of Statistics changed its methodology for measuring unemployment, a change that was sharply criticized by economists, including former Governor of the Bank of Israel Stanley Fischer.
"If you look at other labor market indicators, such as new unemployment claims from National Insurance, you will see that the labor market is deteriorating, which is why we believe that unemployment is increasing," concluded Greenfeld.
Published by Globes [online], Israel business news - www.globes-online.com - on August 29, 2013
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