The registered unemployment rate edged up to 7.1% y/y in February, up from 7.0% in January, according to the latest figures of the state employment agency. The number of the unemployed during the month came in at 65,136, down by 17.7% y/y. The decline in the number of the unemployed decelerated from 18.6% y/y in January. The number of vacancies remains rather high at 14,940, higher by more than twofold compared to February 2017, signaling for the growing labor market shortages. In monthly terms, they also increased by 15.0%, which put the vacancy ratio at four unemployed per vacancy. The employment rate during the month fell by 1.3% y/y, according to our estimates, following two months of increase. Meanwhile, the labor force continued to contract by 2.6% y/y, according to our estimates.
The labor market in the country remains stagnant overall and will continue to be one of the key long-term challenges the economy faces. 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 latest 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 term, unemployment is likely to decline to a certain extent again as of March-April due to the start of seasonal hiring.