The ILO unemployment rate increased slightly to 4.0% y/y in April from 3.9% in March (revised from 3.8%), according to figures of the statistical office INSSE. Yet, in annual terms, the unemployment rate fell from 4.4%, remaining around its record low. The number of unemployed continued to decrease, sticking to a downwards trend for about three years. Yet, the decline in number of jobless somewhat moderated to 10.4% y/y in April, from 10.5% y/y in March and 10.6% y/y in February.
Even if the overall ILO-based unemployment rate is still low, the youth jobless rate stayed at 15.4% in Q1’19. The major discrepancy is mainly the result of weak coordination between labor market requirements and the education system, reflecting a strong need of structural reform. Apart from that, the adult labor force is also not satisfactory for local employers, which keep complaining about talent shortage and lack of skilled workers.
It seems that the labor market tightness persists even though the optimism regarding hiring is fading. High labor costs generated by minimum wage hikes and public-sector wage growths implemented in the past years would probably dampen hiring in 2019, especially since economic outlook is no longer so bright. Besides, the number of employees rise keeps easing probably on the back of fewer vacant jobs and also because employers are less willing to invest in staff training when they cannot find qualified personnel.