Hungary jobless rate leaps to record high of 11.4%

The three-month moving average seldom jumps this dramatically from one month to another. Interestingly enough, a sharp increase was observed in the very same period a year ago, as well. The reasons were similar then: a 0.2-0.3ppt rise is usually “on the cards" due to end-winter seasonal factors, and let’s not forget that the global crisis was weighing down on the labour market constantly.

There is hardly any information available as to why the jump took place. The KSH's preliminary report fails to provide an explanation for the U-rate rising to levels last seen around the change of regime.

What is evident, though is that no matter how strong a start the industry had this year, domestic demand remains feeble, so we still have to wait for favourable processes to kick off on the labour market. Over the past two years, 130,000-140,000 people lost their job in Hungary.

The number of unemployed was 478,700 in Dec-Feb, some 101,000 more than in the same period of 2008 and about 150,000 more than at the onset of the economic crisis.

The good news is that those losing their job do not leave the market altogether, i.e. they do not flee into inactivity as before. The activity rate in Hungary has even ticked up over the past year.

There were 3.73 m people employed in Dec-Feb in the population aged 15-74, about 64,000 less than in the same period of 2008/2009. The number of those economically inactive totalled 3.48 million, down by some 53,000 yr/yr. The participation rate remained unchanged at 54.7% compared to Nov-Jan, but was up from 54.1% in annual terms.

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