The LFS unemployment rate dropped by 0.6pps q/q to 11.5% in Q2’19, the statistical institute (Instat) reported. This was a record low level of unemployment over the past seven years, but we still consider it quite high being over the 10.0% threshold. Finance minister Anila Denaj commented that the LFS unemployment decrease was good news for the economy and confirmed the effectiveness of the government’s employment-promoting policies. We think that the decrease was rather due to the traditional seasonal factors given the stronger labor force demand during the spring and summer seasons in agriculture and tourism sectors. On the downside, the registered unemployment rate rose by 0.1pps q/q to 6.0% in Q2.
The employment rate accordingly rose by 1.1pps q/q to 53.6% in Q2 and the number of employed people went up by 2.1% q/q to 1,270,006. The largest share, 41.9% of the total employed, worked in the non-agriculture private sector. The share of employed people in the agriculture sector expectedly rose to 38.1% of the total, which we consider a very high level, suggesting that the economy diversification pace remains slow. People employed in the public sector represented 14.1% of the total. Overall, we consider the employment growth as a positive factor to favor domestic consumption in the short run, but employed people might prefer to increase their savings than consumption due to the tense political situation in the country, in our view.