The energy and inflation crisis is paralyzing the Portuguese labor market.
According to National Statistics Institute (INE) data through January this year, released yesterday (Wednesday, 1), employment has been virtually stagnant since November (over the past three months, the average year-on-year rate of change was 0.02 % ) and the burden falls entirely on the group of workers over the age of 25, where job destruction has been going on ever since.
In January (still preliminary data), total employment increased by only 0.1% compared to the same month last year, after falling by 0.4% in December.
It is necessary to go back to March 2021, when the country emerged from the most deadly phase of the pandemic, to see a drop in employment (then the drop was 0.3%).
As for unemployment, the bad news also returned. In January, the unemployment rate (which measures the weight of the number of people without work in the total active population) passed the 7% threshold.
It reached 7.1%, the highest figure since the worst days of the covid-19 pandemic. In January 2021, the rate was also of this size.
According to calculations by Dinheiro Vivo (DV) based on INE figures, the national unemployment rate has risen steadily since July last year, when it stood at 5.8%.
Youth unemployment (persons between 15 and 24 years old) also accompanied and exceeded the 20% threshold (was 20.5% in January). The increase in this ratio compared to December was 1.3 percentage points, the largest increase since April 2021.
Also very significant is the dispersion of unemployment in absolute terms.
In January, the unemployed labor force increased by more than 22% (compared to January 2022), to 375 thousand people. It has been rising for three consecutive months.
This 22% jump is the biggest since May 2021 (23%), as the economy slowly emerged from the standstill imposed by the lockdowns and the pandemic.
In January, unemployment among very young people (under 25 years old) rose by almost 18%. The country now has about 77,000 young people out of work.
In the elderly (age 25 and older), the January increase was 23.5%, the strongest since August 2020 (24.2%), according to new data from INE.
‘It is a warning and must be followed closely’
For Vânia Duarte, economist at the BPI research firm (BPI Research), “the increase in unemployment at the beginning of the year should be seen as a warning and should be carefully monitored in the coming months”.
In a note released yesterday, the analyst notes that “the unemployment rate rose to 7.1% in January (compared to 6.8% in December and 5.9% in January 2022)” and that “at the same time, it was slightly higher than in the pre-pandemic (7% in January 2020)”.
“In fact, the number of unemployed in January increased chain and year-on-year (+5.5% and 22.3% respectively), reaching a total of 374,800 people, the highest level since September 2020”.
He adds that “the comparison with the pre-pandemic period is also unfavorable: +4.4% unemployed (+15,700 people)”, says the BPI economist.
The increase in the unemployed population may be related to the entry into the labor market of previously discouraged individuals and -1.2% of the inactive who are looking for a job but are not available. said department of economic studies.
“Another factor that reinforces this idea is the decrease in the inactive population (-0.4% in January), reaching the lowest level of the monthly employment series (2,424,700 people).”
However, the analyst writes in the notes to the new INE figures that “the latest labor market data is in line with the slowdown in economic activity in the final months of 2022, given the rise in interest rates, inflation, extension of the conflict in Ukraine and the softening of trading partners”.
So “the increase in unemployment should be monitored in the near future”. We maintain the expectation that the unemployment rate will rise to a level of around 6.4% in 2023, but we consider the risk of an upward revision to be high.
Luís Reis Ribeiro is a journalist for Dinheiro Vivo
Source: DN
