Unemployment rises to 4 percent in January
Economic commentary by Jakub Seidler, Chief Economist of the CBA
The share of unemployed persons (according to the MLSA methodology) rose from 3.7% to 4% in January, which was above the analysts' estimate of 3.9%. Traditionally, unemployment rises in January compared with December, but this year's increase was slightly higher than would be consistent with normal seasonality (Chart 1). This, in turn, led to the seasonally adjusted jobless rate also rising slightly from 3.62% to 3.65%, reaching its highest level since last September (Chart 2).
In terms of seasonally adjusted jobseekers, the month-on-month increase from the previous month was less than one per cent, the highest since October 2022. However, the explanation for this "less" favorable January labor market trend is probably that, due to the above-average warm weather, seasonal job openings did not pick up as usual in the final quarter of last year, and then jumped only in late December and January, when temperatures began to fall more noticeably below 0. This is consistent with the fact that the month-on-month growth in the number of jobseekers at the end of last year was lower compared to 2022.
Part of the weak January number can thus probably be explained by the effect of the uneven weather-related ending of seasonal work, but part is probably due to a slight cooling of the labour market, as suggested by leading indicators and the latest January PMI survey of industry, where respondents confirmed the shedding of surplus labour. Despite this, however, the domestic labour market is still in decent shape and the mild recession last year has had only a marginal impact on it.
For the full year 2023, the share of unemployed persons reached 3.6%, a marginal increase compared to the previous year. The latest CNB forecast expects an increase to 4.1% this year, while the CBA forecast is for 3.8%. In both cases, however, this is still a relatively modest increase and below the level of 2017, when the domestic labour market was already showing signs of overheating.
