Unemployment rate remains at all-time record low of 3.8% as wage growth holds steady – Indeed
Pawel Adrjan, director of economic research at hiring platform Indeed, analyses the implications of the latest CSO employment data
6 July 2023
The latest CSO data shows Ireland’s main unemployment rate was 3.8% in June on a seasonally adjusted basis, remaining steady from 3.8% in May and down from a level of 4.2% 12 months ago. The seasonally adjusted number of people unemployed was 105,400 in June, and fell by 6,000 in the past 12 months.
Since January of this year, when unemployment stood at 4.3%, the monthly unemployment rate has fallen steadily each month,” says Pawel Adrjan, director of economic research at hiring platform Indeed, commenting on the latest CSO data.
“It hit an all-time record low last month of 3.8% and has now remained at this full employment level for a second month running,” he continues.
“Putting this in perspective, the unemployment rate was last at its former lowest level of 3.9% between October 2000 and April 2001, which was at the height of the Celtic Tiger.
“A low unemployment rate is good news for jobseekers, those looking to change roles or those preparing to ask for a wage increase, but maybe not so for certain employers, especially those already experiencing difficulties in finding the right staff and keeping costs under control.
“The most recent Indeed Wage Tracker showed annual wage growth in Ireland has remained steady at 4.9%, but it comes as growth in advertised wages remains significantly above historical levels in all eight of the tracked countries.
“Amid an uncertain economic growth outlook for the EU and UK, along with higher interest rates and tighter monetary policy from policymakers fighting inflation, unemployment rates remain at or near historic lows. Job vacancies have gradually fallen in most countries, but they are still high relative to historical levels, leading to a tight labour market overall.
“A high ratio of vacancies to unemployment—essentially, when there are more jobs available than workers to fill them—increases workers’ bargaining power, putting upward pressure on wages. There is a strong positive correlation between this ratio and growth in advertised wages in most of the countries tracked by Indeed.
“The pace of wage gains is a critical indicator followed closely by central banks the world over as policymakers continue to fight high inflation.”