Irish unemployment rate ticks up to 4.8% in January

According to the latest Irish monthly unemployment figures published by the Central Statistics Office this morning, there was a seasonally-adjusted total out of work of 120,200 in January, up 3,300 from the revised total of 116,900 (119,000) in December.  

With the monthly rise in the numbers out of work in January, the seasonally-adjusted unemployment rate ticked up to 4.8% from a revised 4.7% (4.8%) in the three previous months.  

Still, the current jobless rate is more than an eleven percentage point improvement from the peak of 16.0% hit in January/February 2012 during the financial crisis. Furthermore, Ireland’s jobless rate is over two-and-a-half percentage points below the current Eurozone average of 7.4%.

The labour market has improved dramatically over the past few years, reflecting the strengthening of the economic recovery, encouraging emigrants to return home. Indeed, the most recent migration estimates showed net inward migration of 33,700 in the year to April 2019, down slightly from net inward migration of 34,000 in the previous year. 

Employment increased in 9 of the 14 economic sectors over the year in the third quarter of 2019, with a record 2.33m at work, an increase of 45,000 in the year. The largest rates of increase were recorded in the Financial, insurance and real estate activities (+12.9% or 13,000) and the Public administration and defence; compulsory social security (+9.8% or +10,200) sectors.

But while there has been a sharp drop in the headline unemployment rate in recent years, the adjusted jobless rate for persons aged 15-24 years (youth unemployment) remains elevated, coming in at 11.8% in January, up from 11.1% in December. In my view, Government initiatives in terms of training, education and upskilling must focus on this age group in particular. There is also the issue of not encouraging older employees to stay in the workforce longer than is absolutely necessary, thereby taking up jobs that could otherwise be filled by 15-24 year olds.

There is clearly a problem with the number of jobs available for school leavers and new graduates from college. For a start, there should be more encouragement in second-level for students to take apprenticeships and away from the overcrowded university system. Then there is the question of experience. How can you gain experience if no one is willing to give you that experience in the first place? 

So while on the surface the Irish labour market looks healthy, there are still a number of faults that need to be mended. But the headline picture remains positive. Although the numbers unemployed have picked up in the past couple of months, suggesting the labour market may have peaked, I’m not so sure. The economy is still performing well enough for further job gains and another drop in the unemployment rate this year, especially with “hard Brexit” fears alleviating, at least temporarily. At this juncture, an average jobless rate of 4.7% is forecast for 2020, down from 5.0% in 2019 and 5.8% in 2018.