Israel's Unemployment Rises to 3.3% in July Due to Seasonal Teacher Layoffs

Israel's unemployment rate increased by about half a percent in July, with the expanded unemployment rate rising from 4% in June to 4.4% in July, and the classical unemployment rate climbing from 2.8% to 3.3%. This rise is largely seasonal, driven mainly by summer layoffs of education and informal education staff without permanent contracts. When adjusting for seasonal factors, the classical unemployment rate showed a slight increase from 2.9% to 3.1%, according to the July Labor Force Survey published by the Central Bureau of Statistics.

The classical unemployment rate rose from 2.8% (128,000 people) in June to 3.3% (148,200 people) in July. Despite this notable change, the figure remains very low in a labor market characterized by frictional unemployment, which is the minimal unemployment necessary for job transitions. Many of those laid off during the summer are expected to return to work by October. The expanded unemployment rate, which includes classical unemployed individuals, those on unpaid leave, and discouraged job seekers, jumped from 4.0% (180,000 people) in June to 4.4% (199,600 people) in July. This measure reflects unemployment during crisis periods and had peaked at 16.6% during Operation Guardian of the Walls in March, comparable to COVID-19 lockdown levels, before returning to a routine level of 4% in June.

Employment rates (excluding those on unpaid leave) slightly increased from 60.1% in June to 60.3% in July. At the peak of the conflict in March, employment dropped to 51.9%. The current figures indicate a return to a wartime routine level between 60% and 61%, though still below the pre-conflict rate of 61%. The difficulty in returning to full employment reflects ongoing high reserve duty mobilization and challenges in the tourism sector. The employment rate, rather than the unemployment rate, better reflects overall economic activity.