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Thursday, May 29, 2008

Hungary Employment and Unemployment February-April 2008

Hungary's unemployment rate dropped to 7.7% year on year during the February-April period, which was down from 8.0% in the first quarter, the Central Statistics Office (KSH) reported last Thursday.

The KSH said the number of unemployed was 323,400, while the number of employed totalled 3,850,400 in the February-April period. The latter figure compares with 3.844 m in Q1 and 3.902 m in the same period of 2007 (ie it was down by 1.35%). The number of unemployed dropped by 9,200 from the previous 3 month period but was up by 9,100 from the total in the same period of last year.

According to Eurostat data the EU harmonised jobless rate (ie the one which is comparable across countries) was 7.8% in Hungary in March.

The participation rate of the 15-64 age group was 61% in Feb-Apr, unchanged from Jan-Mar, but down 0.5 ppts from the same period a year earlier. The employment rate of the population aged 15-64 was 56.2% in the period examined, against 56.1% in the previous 3-m period and down 0.7ppt from Feb-Apr last year.

The KSH said 47.3% of all unemployed have been seeking jobs for a year or more (up from 45.4% in the previous 3 months). The average duration of joblessness came to 17.1 months, up from 16.4 in the previous 3 month period.

In interpreting this data, it is important to bear in mind that Hungary's working age population is actually falling, and at 6.7895 million in Feb-Apr it was down 0.1% over the same period in 2007.

I think what few people are really contemplating at this point is - depending on the velocity of increase in household demand and the velocity of decline in the working age population - we may soon hit a point (if we haven't hit it already, see retail sales chart below) where retails sales may simply not (in constant price terms) ever rise again.

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