Unemployment drops in September as phased PUP reductions kick in

Jack Kennedy, economist, Indeed, says “the continued downward trend in unemployment is welcome"

The Central Bank of Ireland forecasts that the unemployment rate will reduce to 5.9% by 2023

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12 October 2021 | 0

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The Covid-19 adjusted unemployment rate fell to 10.0% in September, from 12.4% in August and 15.9% a year ago, the CSO has reported. These figures are an estimate based on the Live Register and Covid-19 related claims. The main unemployment rate fell to 6.4% in September on a seasonally-adjusted basis, from an adjusted 6.5% in August, and 7.2% 12 months ago.

Jack Kennedy, economist at global job site Indeed, welcomed the news.

“The continued downward trend in unemployment is welcome,” Kennedy said, “and further proof that economic momentum is building following the easing of lockdown measures. The positive trend is consistent with the optimistic employment outlook today from the Central Bank of Ireland, which is forecasting that the unemployment rate will reduce to 5.9% by 2023.

“We should be mindful that the labour market is now entering an important transition phase, with the PUP supports being reduced on a phased basis from last month through to February 2022,” he added. “We must hope that as these stabilisers come off, people are able to return to their previous roles or find suitable alternative employment.”

He also noted “an interesting trend” whereby “as the reductions in PUP came closer, people on the PUP become much more active in their job searching, with a recent Indeed survey showing 36% of those on PUP were urgently seeking a new role in August, rising from 13% in July”.

“This cohort should find plenty of opportunities given the strong demand from employers for staff,” Kennedy said, “with the level of job postings on Indeed Ireland 37% ahead of their pre-pandemic baseline. Sectors like tourism and hospitality are amongst those facing acute staff shortages.

“Where roles are struggling to be filled it may be that childcare responsibilities or ongoing concerns related to the threat of Covid-19 are acting as a barrier,” he added. “One factor in the decline in unemployment in September could be that as the schools return it has become easier for parents to re-join the labour force.

“Our research also suggests that over a quarter of job seekers are still waiting for more job opportunities before taking the plunge, indicating a potential disconnect between the roles employers want to fill and the types of jobs that are viewed as desirable.”

 

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