Israel’s Employment Rate Rises but Remains Below Pre-War Levels After Operation Guardian of the Walls

Israel’s employment rate in June rose slightly to 60.1% but has not yet recovered to pre-Operation Guardian of the Walls levels, according to data released by the Central Bureau of Statistics. The employment rate had dropped sharply to 51.9% during the peak of the conflict in March and was 60.5% in January before the war began on October 7. Since the war started, the employment rate has fluctuated between 60% and 61%, below the pre-war level of over 61%.

Meanwhile, the expanded unemployment rate, which includes classical unemployed, those on unpaid leave, and discouraged workers, fell to a very low 4% in June from 4.1% in May, indicating near-complete employment. This rate had surged to 16.6% at the height of the conflict in March and was 6.8% in April. The classical unemployment rate remained stable at a low 2.8% in June, down slightly from 2.9% in May, reflecting frictional unemployment, the minimal level necessary for job transitions.

The slow recovery in employment is attributed to the ongoing high reserve military mobilization and the crisis in the tourism sector. The Central Bureau of Statistics emphasized that the employment rate, rather than the unemployment rate, better reflects economic activity levels. The data highlights the continuing challenges in returning to normal economic conditions following the conflict.