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Jobless rate continues gradual fall

The rolling three-month average number of unemployed people in Hungary in August–October 2018 was approximately 172,900, some 10,600 fewer than a year earlier, resulting in the jobless rate falling by 0.3 of a percentage point year-on-year to 3.7%, the Central Statistical Office (KSH) reported Wednesday.

The KSHʼs statistics cover unemployment among various age groups between the ages of 15 and 74. In August–October 2018, compared to a year before, the unemployment rate among men aged 15–74 decreased to 3.3%, while the jobless rate among women fell to 4.1%.

The jobless rate among the younger generation aged 15–24 declined by 0.6 of a percentage point year-on-year, to 10.5%. More than one-fifth of the unemployed belong to this age group. The unemployment rate among the 25–54 age group, i.e. persons belonging to the "best working age," hardly changed, standing at 3.3%, while that of people aged 55–74 fell 0.6 of a percentage point to 2.5%.

The average duration of unemployment was 15.1 months; some 41.1% of jobless people had been searching for a job for one year or more, i.e. were classed as long-term unemployed.

At the end of October, compared to a year earlier, administrative data of the National Employment Service (NFSz) show that the total number of registered job seekers decreased by 6.1% to 244,000.

57,000 more in work

In August–October 2018, the average number of employed people was 4,502,100, some 57,000, or 1.3%, more than a year earlier. The overall employment rate was 60.6%, slightly increasing from 60.4% in the previous period, and up from 59.7% from one year earlier.

In August–October, compared to a year before, the increment in the domestic primary labor market was 108,600, while there were some 2,300 more people working abroad. The number of people declaring work in public employment fell 53,800, down 28.8% year-on-year.

The overwhelming majority of employed people were aged 15–64, and the employment rate in this age group grew by 1.1 percentage points to 69.8%. The number of employed men aged 15–64 increased by 1.1%, and their employment rate by 1.1 percentage points to 77.0%. The number of employed women aged 15–64 grew 0.7%, and their employment rate by 1.0 percentage point to 62.7%.

Broken down into age groups, the employment rate among young people aged 15–24 changed little, standing at 29.9%, while the employment rate among those of the "best working age" of 25–54 years was practically unchanged, at 84.2%. In the older, 55–64 age group, the employment rate grew by 3.4 percentage points to 55.6%.

The employment rate among Hungarians aged 20–64 – the coverage regarding the development of employment objectives defined in the Europe 2020 Strategy – grew by 1.1 percentage points to 74.9%. The European Union has targeted raising average employment to 75% by 2020; in Hungary, the employment rate in this age group is currently 82.8% for men, and 67.2% for women.

Towards full employment?

Speaking to state news agency MTI, ING Bankʼs chief analyst Péter Virovácz said Hungary has effectively "reached full employment," based on the fact that the jobless rate has been stable since January and if accounting for seasonal effects, which means - in his view - that the structural state of the domestic labor market leaves no further room for improvement. The unemployment rate could be at 3.6% at the end of the year, he added.

TakarékBank analyst András Horváth argued that there is still opportunity for the employment rate to grow by 4-5 percentage points among the ideally aged working population (aged 25-54). Based on the number of active workers, this could still provide workers for 250,000-300,000 unfilled jobs, so it is premature to talk about full employment, he added.

K&H Bankʼs chief analyst Dávid Németh said structural changes are needed for further improvements in employment. Fostered workers could be redirected into sectors struggling with labor shortages following training and education programs, he argued, adding that the spread of part-time and remote work jobs should be encouraged.

Unemployment and employment data for the next three-month period of September–November 2018 will be published in January.