The registered unemployment rate edged down from 7.1% in February to 7.0% in March, according to the latest figures of the state employment agency. The number of jobless people amounted to 64,631, down by 1.0% m/m. In annual terms, the decline in their number decelerated to 15.4% y/y. Meanwhile, the employment rate rose by 1.7% y/y, following a 1.0% drop in February, according to our estimations. The improvement was likely attributed to the start of seasonal hiring. On another positive note, the labor force expanded by 0.3% y/y, our estimates showed. Data on the number of vacancies was not published, but given the growth in employment they have likely decreased slightly. Still, their number remains notably higher than in the same period last year, signaling for significant labor shortages. For reference, vacancies were more than twofold higher in February 2018 compared to the same month last year.
Looking forward, despite the slight growth in employment and the marginal expansion of the labor force, the labor market remains stagnant. In the long-term, the share of old-age population is on the rise, and so is emigration of working-age citizens. These two factors in addition to a mismatch between skills and jobs will continue to weigh down on employment growth. We remind that the European Commission argued in its winter interim report that the tightening of the labor market will give little room for employment growth, which will on the other hand contribute to the slowdown of GDP growth in the next two years. In the short-term, seasonal hiring in the next few months should somewhat boost employment growth.