The share of unemployed recorded a mild increase in January and reached its highest level since August. However, it is set to begin its way south in the months to come as seasonal works start in the spring. The number of vacancies has increased further, showing there are plenty of jobs but that it is difficult to fill them.
January’s share of unemployed increased one tick compared with December due to unfavourable seasonality by printing 3.9%. After calendar adjustment, the share of unemployed slightly dropped (roughly 0.05pp), but it does not resemble the plunges it recorded last year. In contrast, the vacancy growth dynamics have not halted a bit. The number of vacancies increased to a record-high 231,000 and is quickly approaching the number of reachable job applicants. After seasonal adjustment of both series, we already see a higher number of vacancies than job applicants. This means there are plenty of jobs but the labour supply does not offer suitable candidates. Demand on the labour market does not meet supply. First, job applicants live in different locations than where jobs are offered, and people are not willing to move. Second, employers’ demands differ from what job applicants offer. That said, we cannot expect any significant drop in the share of unemployed.
From March, seasonal factors will push the share of unemployed downward. It should hit its bottom in October, when it will print 3.3% in our view. The average in 2018 should record 3.5% after last year’s 4.1%.