Unemployment down in Q3

Central Bureau of Statistics: The unemployment rate fell to 6.1% in the third quarter, from 6.8% in the second quarter.

Layoff plans by Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) and other large employers, as well as warnings by manufacturers about the drop in exports, have increased fears of weakness in the labor market and a pending wave of layoffs. However, the Central Bureau of Statistics and the Ministry of the Economy both published upbeat data, at least as far as the third quarter of 2013 is concerned. The data may ease the main fear prevailing in the labor market, of a domino effect of layoffs due to the grim mood and not necessarily because of economic indicators.

The Central Bureau of Statistics reports that the unemployment rate was 6.1% in the third quarter, down from 6.8% in the second quarter. The drop in the unemployment rate was nationwide: for example, in the Northern District the unemployment rate fell to 8.5% from 9.2%. Participation in the labor force, which is low compared with the average in developed economies, rose slightly to 59.9% in the third quarter from 59.3% in the preceding quarter. The proportion of full-time employees rose to 77.1% of all employees in the third quarter from 76.8% in the preceding quarter.

The Ministry of the Economy data indicate an increase in demand for employees and other fairly good figures. The number of available jobs rose by 8.8% to a daily average of 70,600 positions in the third quarter from 64,900 positions in the second quarter. The increase was mostly in construction, financial services, communications, transportation, and education. The jobs balance - the ratio between hiring and departures - remained positive; i.e. more people were hired than left their jobs.

The number of hirings was stable compared with the preceding quarter, while the number of departures fell. Most of the departures were voluntary (73.5%), rather than firings. For the sake of comparison, the proportion of voluntary departures was 63.1% during the second quarter. A high proportion of voluntary departures indicates employees' confidence in the labor market, but it is not possible to know from the data the age of the employees who voluntarily left their jobs, and it can only be assumed that they were young employees. In general, the number of firings in the third quarter fell by 30% to 19,700 a month from 28,200 a month in the second quarter.

The Survey of Employers Expectations is also more positive than before. For example, whereas most employers in the second quarter expected a downturn in their business, in the third quarter, most employers expected stability. The word "stability" also appears in employers' expectations about their labor force.

Despite the favorable data, it should be emphasized that they refer to the third quarter, before the reports in recent weeks about streamlining plans, which are likely to be reflected in the fourth quarter of 2013 and especially in the first quarter of 2014.

Published by Globes [online], Israel business news - www.globes-online.com - on October 31, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018