Israel's Unemployment Rate Drops, But Labor Shortages Persist

Israel's unemployment rate fell to 2.9% in August from 3.3% in July, according to data released by the Central Bureau of Statistics on September 15. The number of unemployed individuals decreased by approximately 17,000, from 148,000 to 131,000. Seasonally adjusted unemployment stood at 2.8%.

An expanded measure of unemployment, which includes those who stopped seeking work, left jobs within the last two years, or were put on unpaid leave, also saw a decline. This figure dropped from about 200,000 to 179,000 people, or from 4.4% to 3.9% of the labor force.

However, the participation rate in the labor market decreased slightly to 62.1% in August from 62.5% in July, representing about 30,000 fewer people. This could be attributed to an increase in retirements and younger individuals entering the workforce later. The report notes that Israel's overall labor force participation rate remains relatively low compared to other countries, partly due to low employment among ultra-Orthodox men and Arab women.

Despite a slight decrease from 4.4% in July to 4.3% in August, the number of job vacancies remained high at around 143,000. The decline in vacancies, by about 3,000, may indicate that current wage levels are sufficient for employers to attract workers, potentially easing inflationary pressures. While demand for roles like waiters, bartenders, kitchen staff, and telemarketers saw notable drops of 9% to 14%, shortages persist in these areas.

Similarly, vacancies for engineers and software developers decreased by 7% and 9% respectively. Nevertheless, demand remains strong, with approximately 11,200 engineering positions and 6,200 software development jobs available.