Unemployment still at two-decade low despite souring outlook

The State’s jobless rate fell to a two-decade low of 4.4 per cent in November, down from a revised rate of 4.5 per cent in October, despite the darkening economic outlook.

The 4.4 per cent rate was lower than the 4.8 per cent recorded in November 2019, before to the pandemic.

The Central Statistics Office’s unemployment figures indicated there were 117,800 people classified as unemployed in the month on a seasonally adjusted basis, compared with 118,200 in October.

The agency said there was a decrease of 19,900 in the seasonally adjusted number of people unemployed in November this year when compared with a year earlier.

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The lifting of Covid-related restrictions has triggered a rapid turnaround in unemployment, which had risen to record levels at the height of the pandemic.

Economists see an unemployment rate of 4 per cent in the Republic as amounting to full employment.

“As we reflect on 2022, it is difficult to comprehend just how different the economic environment is. At the start of the year, momentum was building for a strong economic performance,” Andrew Webb, chief economist at Grant Thornton Ireland, said.

“As we know, inflation then tightened its grip on the economy and has injected significant pain and challenge. Throughout, the labour market has confounded weaker consumer and business sentiment surveys to continue growing,” he said.

“Today’s figures provide further encouragement, but we remain mindful of recent churn in the tech sector, which may impact unemployment figures in the months ahead. There is no doubt that the months ahead will be bumpy, but the labour market enters this period in a position of strength,” he said.

Pawel Adrjan, economist at global recruitment website Indeed, said the Irish labour market continued to show considerable strength despite economic headwinds and uncertainty while noting job postings on Indeed were 69 per cent above pre-pandemic level.

“Low unemployment levels and a tight labour market may impact on employers’ ability to accommodate the Christmas rush as businesses remain constrained due to a lack of staff,” he said.

“There are warnings of labour shortages in sectors including hospitality, retail and construction, which rely on seasonal hires to manage the surge. Whilst this is challenging for business owners, it may put employees in a strong position as wage inflation, alongside other inflationary pressures such as energy prices, is already at the forefront,” Mr Adrjan said.