Unemployment Rate Drops to 4.2%

The main unemployment rate was 4.2% in February on a seasonally adjusted basis, down from 4.5% in January and up from 4.1% in February 2023. There was an increase of 6,500 in the seasonally adjusted number of people unemployed in February 2024 compared with a year earlier.

Jack Kennedy, senior economist at global jobs platform Indeed, comments on the latest CSO data:

In February, the main unemployment rate was 4.2%, down slightly from the 4.5% recorded for the previous two months and compared to 4.1% in February 2023.

Despite challenges such as geopolitical uncertainty and a global economic slowdown, the labour market remains robust. Low unemployment levels have driven strong consumer spending, supporting the domestic economy amid a slowdown in multinational exports. Consumer sentiment is improving amid a sense that cost-of-living pressures are easing somewhat, although many consumers are likely to need further evidence of better days ahead before this becomes more ingrained.

For employers in many sectors, recruiting staff is likely to remain difficult for now, especially at a time when wage growth has slowed, suggesting many are simply not in a position to offer would-be recruits higher salaries.

Irish job postings on Indeed remain 16% above pre-pandemic levels at the end of February, albeit this is down from 23% in January and the same level recorded in December 2023.

The labour market remains tight despite the positive news of record participation levels, especially among women.

The latest Labour Force Survey showed total employment was 2.71 million (2,706,400) at the end of 2023, a new record and up 89,600 or 3.4% compared with a year ago. It included

40,500 males, up 2.9%, and 49,200 females, up 4%.

Full-time employment was up by 58,600, a 2.9% increase year on year, and part-time employment was up 31,000, a 5.5% increase.

The overall levels of unemployment rose marginally from 4.1% in Q4 2023 to 4.2% in Q4 2023, but the increase in participation, especially among women, would suggest more people are availing of opportunities to enter the workforce and finding work that suits their particular needs.

This could be explained in part by the ongoing availability of remote, hybrid and flexible working arrangements. Research by Indeed recently showed that the popularity of remote work and the willingness of many employers to offer it post-pandemic remains at or near peak levels. As of the end of January of this year, a total of 15.4% of Irish jobs postings contained one or both terms, down slightly from a peak of 18.4% recorded during the Covid pandemic in April 2021, but above the 14.7% average recorded since the start of 2021 and well above the average of 11.0% since the start of 2019.

The rise in female participation rates and enhanced workforce flexibility imply that amid a tight labour market, there are opportunities for employers to explore if they are open to offering flexibility.