Unemployment falls to pandemic low of 6.9% as economy rebounds

Latest CSO jobless figures point to strong recovery in State’s labour market

Jobs site Indeed says it has noted a slight dip in postings for jobs from the hospitality and food service sector of late. Photograph: iStock

Jobs site Indeed says it has noted a slight dip in postings for jobs from the hospitality and food service sector of late. Photograph: iStock

 

The rapid rebound in economic activity has pushed unemployment down to a pandemic low of 6.9 per cent. This time last year the jobless rate was more than 20 per cent.

The latest jobless figures from the Central Statistics Office (CSO) point to strong recovery in the State’s labour market since the lifting of restrictions in May.

The CSO estimates there were 179,720 people either out of work or in receipt of the Government’s pandemic unemployment payment (PUP) in November.

This equated to a Covid-adjusted rate of unemployment of 6.9 per cent, down from 7.9 per cent the previous month and a pandemic high of 31 per cent in April 2020.

The standard measure of unemployment, which does not include PUP recipients, was put at 4.8 per cent.

“Today’s unemployment figures reflect the continuation of a consistent positive trend since restrictions were lifted earlier this year,” chief economist at Grant Thornton Ireland, Andrew Webb said.

“The pandemic low rate of 6.9 per cent for the Covid-19 adjusted rate, coupled with strong vacancy levels, suggests a labour market that has been shaking off the trauma of the last 18 months with relative ease,” he said.

Exchequer returns on Thursday and the latest national accounts from the CSO on Friday are likely to detail a significant jump in output and activity in the wake of the reopening of the economy in May and June.

Dampened outlook

However, the emergence of the Omicron variant and the possibility that the strain could result in renewed disruption has dampened the outlook.

“Warnings of labour shortages in sectors including hospitality, retail and construction have all been sounded in recent weeks, and the ability of businesses to accommodate the Christmas rush may be constrained due to a lack of staff,”Jack Kennedy, economist with recruitment site Indeed, said.

“ Whilst this is challenging for business owners, it puts workers in a strong position to seek wage increases and we can expect labour cost inflation to be a feature of 2022, alongside other inflationary pressures such as energy prices,” he said.

Mr Kennedy also raised the prospect that the emergence of the Omicron variant of Covid-19 will result in further restrictions, which could potentially derail the downward trend in unemployment.

“In the past week Indeed has noted a slight dip in postings for jobs from the hospitality and food service sector, perhaps indicating nervousness about rehiring due to the Covid spike,” he said.