Country Report Israel January 2011

Economic performance: Unemployment edges up as labour force expands

The unemployment rate rose to 6.6% in the third quarter, from 6.4% in the second-the first increase since the recession ended in the second quarter of 2009. This was the main negative finding in an otherwise strongly-positive quarterly Labour Force Survey published by the Central Bureau of Statistics (CBS) on November 30th.

On a seasonally adjusted basis, unemployment for the labour force as a whole fell from a peak of 7.8% in April-June 2009 to a low of 6.4% in the parallel quarter this year. Moreover, in the 25-64 age group, which comprises the bulk of the labour force, unemployment continued to fall in the most recent quarter, edging down from 5.7% to 5.6%. This suggests that the newly unemployed are mostly young people who have just joined the labour force. This conclusion is supported by the survey's findings regarding continued expansion of the labour force itself-a sharp rise of 0.7 percentage points from the second to the third quarters, to 57.8% of the total population over the age of 15, and a similar rise to 76% of the population aged 25-64.

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