Unemployment stagnated in August
Economic commentary by Jakub Seidler, Chief Economist of the CBA
The share of unemployed persons (according to the MLSA methodology) stagnated at 3.8% in August, which was in line with analysts' estimates. Without rounding, it then rose slightly from 3.77% to 3.82%. Traditionally, unemployment in August has remained at a slightly higher level after a rise in July, which is attributed to less hiring activity by firms, but also to a short-term increase in the number of unemployed people coming onto the register as the school year ends and leaving the register again as it begins. More graduates are also entering the labour office register during the summer. Thus, the July rise in unemployment and the August stagnation are normal seasonal phenomena and this year's increase is no different from previous years (Chart 1a). The seasonally adjusted share of unemployed persons thus stagnated in August, but has been rising steadily since the end of last year (Chart 1b).
The number of jobseekers increased only slightly by 3.3 thousand in August. The highest increase was in the Moravian-Silesian Region by 0.6 thousand, on the contrary, the number of vacancies increased by 1.2 thousand and reached 263 thousand. In terms of seasonally adjusted figures, the number of applicants rose by 0.2% month-on-month, the lowest month-on-month increase this year, and the number of vacancies fell by 0.5%, also among the lower month-on-month declines this year. August and July labor market data thus provide slightly positive signs that the cooling of the labor market seen since late last year is easing slightly.
Although the domestic labour market remains in a state where many employers are struggling to find suitable staff, the CSO survey suggests that, in general, staff shortages are becoming less of a barrier to firms' continued growth (Chart 2). According to the CSO leading indicators, firms in industry (especially non-automotive), services (especially the financial services part), and construction are planning to reduce employment in the coming months, while employment in retail trade is expected to stagnate. The domestic labour market has thus experienced a slight cooling in recent quarters, which has, however, been easing in recent months. The current CBA forecast expects the share of unemployed persons to increase to 3.8% this year and to stagnate at this level next year, while the CNB forecasts a slight increase to 3.9% and 4% in 2025 and 2026). These are generally still low values below the 2017 level, when the domestic labour market has already started to show signs of overheating (Chart 4).
