Hungary’s unemployment drops further to 4.9%

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The number of unemployed people in Hungary dropped further by 77,000 to 227,000, or by 1.7 percentage points to 4.9%, in the June-August period, as compared to a year earlier, Hungary’s Central Statistical Office (KSH) said today in a first release of data. Analysts forecast economic growth but growing labor shortages based on the figures.

In the June-August period, the number of unemployed men aged 15–74 decreased by 33,000 to 122,000, and their unemployment rate by 1.4 percentage points to 4.9%. The number of unemployed women declined by 44,000 to 105,000, and their unemployment rate by 2.2 percentage points to 5.0%, the KSH said in its report.

The average duration of unemployment in the period was 18.6 months, while 49.3% of jobless people had been searching for a job for one year or more, i.e. were characterized as long-term unemployed, the KSH added.

In June–August 2016, the number of employed people was 4,386,000, some 135,000 more than a year earlier, according to the KSH. The employment rate of people aged 15–64 increased to 67.1%, while the improvement in the employment indicator for women was slightly stronger.

When calculating employment figures, the KSH includes 230,800 Hungarians in fostered work programs and 114,800 working abroad, Hungarian news agency MTI noted. The KSH includes in its definition of “employed” anybody who worked one or more hours a week or who was temporarily absent from their job during the survey week, MTI added.

Rising employment reflects lively economic growth, which is expected to accelerate in the second half, Takarékbank analyst Gergely Suppan told MTI. Suppan expects the number of employed people to reach 4.4 million in the coming months, chiefly boosted by seasonal factors, while the average jobless rate would drop to 5.3% this year and to below 5% next year from 6.8% in 2015, MTI reported.

The improvements on the labor market and announced new investments nevertheless project an increase in labor shortages in the coming quarters if decision-makers do not act in time, Péter Virovácz of ING Bank told the news agency, warning that labor shortages could hamper growth.

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