Unemployment falls to 11.6% in June

The CSO has this morning released the Live Register for June. It reveals that the seasonally adjusted number of people on the Register fell by 4,400 during the month, bringing the standardised unemployment rate to 11.6%, down 10bps m/m and 350bps below the peak of 15.1% reached in February 2012. Ireland’s standardised unemployment rate is in-line with the latest disclosed rate for the Eurozone (11.6% in May).

The seasonally adjusted number of people on the Register has now fallen for 24 successive months, with the current total (386,200) some 14.0% below the peak. This improvement has been helped by the upturn in total employment (+3.5%) since the Q1 2012 trough. The latest QNHS release from the CSO revealed a seasonally adjusted 0.1% q/q rise in total employment (+2.3% y/y) in Q1 2014.

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However, elsewhere in the release we see that, notwithstanding the above trends, emigration continues to have an influence on the headline numbers, with the total number of people under the age of 25 on the Register declining by 9,861 over the year to June (-13.8%), while the total number of people over the age of 25 on the Register fell by 26,683 (-7.3%) over the same period. The ratio of over-25s to under-25s has increased to a high in the current cycle of 5.69:1 (it was 3.53:1 at end-2008).

Another challenge is the issue of long-term unemployment. In June some 188,858 people or 47.4% of the total had been continually on the Live Register for one year or more. Addressing this problem is a top priority for policymakers. The government has unveiled a range of ‘Activation Programmes’ to help with this process, but the number of people enrolled on these in May 2014 (74,587) was 2.4% below year-earlier levels. Within that, the numbers on Back to Education courses (18,300) has fallen by 19.8% over the past year – not a trend we would like to see continue given the need to retrain or up-skill many of those who are out of work, although we note that this series can be volatile on a monthly basis.

In all, while the underlying trends in the Irish labour market are positive, much remains to be done in order to address the legacy challenges from the economic downturn.

Source: Philip O’Sullivan, Investec. www.investec.ie