Unemployment across OECD falls to 5.8% in September

Unemployment across the OECD area fell to 5.8 per cent in September, the fifth consecutive monthly fall.

The latest figures from the Organisation for Economic Co-operation and Development correspond to 38.7 million unemployed workers.

The headline rate is now just 0.5 per cent above the pre-pandemic rate observed in February 2020.

However, the OECD said the fall in unemployment since the April 2020 peak should be interpreted with caution, as it largely reflected the return of temporary laid-off workers in the US and Canada, where they are recorded as unemployed, unlike in most other countries, including European member states, where they are recorded as employed.

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“Furthermore, the unemployment rate may conceal additional slack in the labour market due to the pandemic as some non-employed people may be out of the labour force, either because they are not able to actively look for work or are not available to work,” it said.

The euro area unemployment rate declined slightly in September (to 7.4 per cent, from 7.5 per cent in August).

The agency's latest unemployment barometer records a jobless rate for Ireland of 6.4 per cent in September.

Covid-adjusted rate

However, the Central Statistic Office’s Covid-adjusted rate, which includes people in receipt of the Pandemic Unemployment Payment (PUP), for September was 8.9 per cent. This fell to 7.9 per cent in October, down from a pandemic high of 31 per cent in April 2020.

The Central Bank of Ireland suggests a post-Covid growth surge in the Irish economy will create 160,000 additional jobs over the next two years, reducing the unemployment rate to below 6 per cent.

In its latest quarterly bulletin the regulator predicted turbo-charged growth of 15.3 per cent this year, nearly double its previous forecast in July, and 7.2 per cent next year on the back of a rapid resurgence in consumer spending linked to the unwinding of €16 billion in excess savings built up during the pandemic.

The tightening of the labour market in recent months has also been accompanied by upward wage pressure, with the CSO reporting a 3.9 per cent increase in labour costs in its most recent quarterly update.