Unemployment rises for third consecutive month as Irish labour market softens

Headline unemployment in the Irish economy rose for a third consecutive month in October suggesting the labour market is softening in the face of a slowdown internationally.

Central Statistics Office (CSO) figures show the seasonally adjusted unemployment rate for October was 4.8 per cent, up from 4.7 per cent in September, 4.5 per cent in August and 4.4 per cent in July.

The 4.8 per cent rate for October corresponded to 132,800 individuals and an annual increase of 13,300, the CSO said.

It comes amid a slowdown internationally on the back of higher interest rates and weaker global demand.

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Eurostat figures published on Tuesday showed the euro zone economy shrank in the third quarter as 10 straight interest rate hikes from the European Central Bank (ECB) took their toll on demand, raising the prospect of recession across the bloc.

Ireland had the largest quarterly decline in GDP in the euro zone, primarily on the back of a decline in multinational exports. The Irish economy has now contracted in three of the last four quarters.

Responding to the latest unemployment numbers, Jack Kennedy, economist at recruitment site Indeed said the latest unemployment numbers pointed to an “ongoing softening in the Irish labour market, which had previously remained close to full employment for a sustained period.”

Still, there was no major cause for concern just yet, he said, noting Irish job postings on the site remained well above pre-pandemic levels as of the end of October.

Mr Kennedy also noted that Irish wage growth data shows a rise to 4.1 per cent year-on-year in September, up from 3.7 per cent in August, “most likely driven by ongoing recruitment difficulties in key sectors such as engineering, construction, and financial services”.

“Wage growth in Ireland is likely to remain flat in the near to medium term. The Budget 2024 measures should improve sentiment among employees once the full impact of the changes hits pay packets and energy credits take effect at a time when energy costs are already reducing,” he said.

Highlighting the fall-off in inflation here and across the euro zone, Mr Kennedy said the decline in price growth is likely to “mean an end to interest rate rises for now, something both employers and employees should welcome”.