Israeli Job Market Recovers Gradually with 57% Drop in Unemployment Since Military Operation

The Israeli labor market is showing signs of gradual recovery following the military operation "Roaring Lion." By the end of June, the number of job seekers fell to approximately 169,000, marking a 6% decrease from May and a significant 57% drop from the peak of around 396,000 during the height of the conflict. Despite this improvement, the figure remains about 8% higher than in June 2023, before the war began. When adjusting for seasonal factors, the number of job seekers slightly increased from 177,000 in May to 179,000 in June, indicating that the labor market has not fully returned to pre-war conditions.

Younger job seekers under 34 showed the fastest return to work, with a 10% monthly decline in June and a 57% overall decrease since April. Middle-aged workers (35-54) saw a 6% monthly drop and a 43% total reduction, while those 55 and older experienced a slower 3% monthly decline and 32% overall decrease. Women accounted for 54.1% of job seekers, slightly higher than last year but trending toward normal levels. Among population groups, the Arab community saw an 8.5% decrease in unemployment, the ultra-Orthodox a 6.5% drop, and non-ultra-Orthodox Jews a 5% decline.

Cities with the highest unemployment rates among those with over 40,000 residents were Umm al-Fahm (5.7%) and Rahat (5.6%). Sectors reliant on physical presence and gatherings, which were hardest hit during the fighting, showed the quickest recovery. For example, job seekers among gardeners and crop growers dropped by 80%, waiters and bartenders by 78%, childcare workers and teacher assistants by 77%, and sports and fitness workers by 64%. In contrast, tech-related professions that allow remote work, such as software developers and database specialists, saw more modest decreases of 4% and 6%, respectively.

A notable shift occurred in the socioeconomic composition of unemployed workers. The share of job seekers from higher socioeconomic clusters (8-10) rose to 20.6%, up 3.4 percentage points from June 2023, while those from lower clusters (1-3) declined to 36.8%, down 3.2 points. The Employment Service described this as a weakening of the stronger groups and strengthening of the weaker ones.

Employment Service CEO Einav Mishash commented, "The data indicate a continued return to routine in the labor market, but also show that the current routine differs from the pre-war period. Alongside the significant drop in job seekers, we see a change in the composition of those remaining outside the labor market. The Employment Service continues to provide tailored support to every job seeker, focusing on strengthening skills for optimal integration into the changing labor market, including AI skills."