Jobless Rate Hits 20-Year Low, With an Asterisk

YERUSHALAYIM -

The Central Bureau of Statistics announced on Monday that the unemployment rate has fallen for the fourth consecutive month: from 6.6% of the labor force in April 2013, in trend figures, to 6.3% in August.

Seasonally adjusted figures show the same trend: The unemployment rate fell from 6.8% in April to 6.1% in August — a 20-year low.

However, the figures should not be cause for euphoria, cautions Globes. Any record for unemployment should be accompanied by an asterisk, indicating complicating factors.

First, the seasonally-adjusted data may not give an accurate picture, because of the change in the Central Bureau of Statistics’ methodology in early 2012, because in order to neutralize non-economic factors (seasonally adjusted) a sufficiently long timeline is needed to accurately measure seasonal effects.

Harel Finance analyst Ofer Klein predicts that the unemployment will rise to annual average of 6.5% of the labor force this year and to an annual average of 6.9% in 2014 for three reasons: The steady increase in participation in the labor force following the reduction in welfare payments; the steady drop in exports, due to the weak recovery in the European and U.S. markets; and the expected slowing in private consumption, following tax hikes that will reduce disposable income.