Unemployment rate slightly over expectations

Hungary's unemployment rate averaged 11.1% during the three-month period, rising from 10.7% in Q4 but down from 11.2% one year earlier, the Central Statistics Office (KSH) said in the morning. The number of employed averaged 3,816,000, down 34,600 from October-December and up 40,000 from the same period a year earlier.


ING's David Németh said the unemployment rate was slightly over the 11% estimate. He added that the number of unemployed grows at the start of every year because of seasonal effects.


Németh expects the rate to move between 10.5-11% in 2012 and saw it reaching 10.7% at year-end. He projected no change in employment as layoffs of low-skilled workers because of tax changes and a review of those on disabled pension could be offset by workforce additions resulting from stricter disability rules and the "Start" back-to-work program.


Gergely Suppan of Takarékszövetkezeti Bank also said the November-January unemployment rate was a bit higher than expected but still showed improvement over the same period a year earlier. He attributed the 34,700 drop in the number of employed from October-December to seasonal factors and declining employment in public work program. He added that employment numbers would probably fall in the coming months because of layoffs announced at national carrier Malév, Budapest Airport and Nokia, but they could start climbing again in March.


Suppan said the unemployment rate could rise to 11.5% at the beginning of the year before falling to 10.5-10.6% in the summer months. He put average annual unemployment for 2012 at 10.8%.


The annual jobless rate in the 15-74 age group fell to 10.9% last year from 11.2% in 2010.