Economy
INSTANT VIEW - Unemployment rate in Hungary at dizzying height of 11.4% (2)
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(Adds comment by Concorde Securities)
Hungary’s rate of unemployment leaped to a record high of 11.4% in the three month period between December 2009 and February 2010 from 10.8% in the previous three months.György Barta, CIB Bank, Budapest
The unemployment rate rose to a whopping 11.4% in the December-February period, well above the 10.8% rate previously seen. The favourable effects of the mild recovery in export-oriented production and inventory accumulation could have faded somewhat at the beginning of the year, along with fewer hirings taking place in services in the late winter season."
“The negative effects of the recession are still around, the 11.4% level is the highest since 1994. Just a year ago, the jobless rate had stood at a much lower 9.1%. The number of unemployed rose to 478,700 (101 thousand more than a year before), while the total number of people at work equalled 3.73 mln."
“The unemployment rate is expected to rise deeper into double-digit territory this year, as the labour market belatedly reacts to the deterioration in the country’s economic performance and the announced corporate layoffs (a trend also evident in Hungarian wage data)."
“The timing of the labour market turnaround is still uncertain, growth will probably be too slow during most of 2010 to create a sufficient number of new jobs (similarly to core markets, where labour market easing is also expected to continue well into this year, especially as fiscal stimuli fade away)."
“Also, Hungarian fiscal stimuli (e.g. public works contracts) provided to the labour market are weaker than elsewhere, given the strict budget constraints."
“The jobless rate could rise further during the first half of 2010, with a higher average jobless rate in 2010 than in 2009. It has also yet to be seen what the next government will do to decrease the proportion of the inactive population, seeing that opposition party Fidesz’s main priority seems to be job creation (which, in turn, could also widen the taxpayer base)."
Gábor Ambrus, 4Cast, Sofia
“Hungary's Dec-Feb U-rate jumps to 11.4% from 10.8% a month earlier and way above mkt 10.9% and 4Cast 10.8%. Market and us had expected that following the lay off waves of last year and this Jan the pace of job cuts would slow. Indeed, it did, (24K jobs destroyed in Feb vs 48.5K a year earlier) but the activity rate has tricked everyone: M/M activity was basically flat vs a steep decline expected, and hence the Feb jobs cuts were fully transmitted to the unemployment figures. To compare, lower activity absorbed around half of the unemployment shock a year earlier."
“True, ultimately it is just an 'accounting' phenomenon, depending on whether the freshly laid off are seeking or not seeking jobs, still the figures look ugly. The bottom line of today's U-stats is that the freshly unemployed are desperately trying to seek jobs - even more desperately than a year ago and this was the key reason why the U-rate surprised so strongly. The core of the workforce is still suffering heavily - bad news for growth, good news for inflation."
János Samu, Concorde Securities, Budapest
"The worsening reflects the fact that economic activity still lacks an important engine in Hungary. The domestic demand is held down partly by the scarcity of credit and to a larger part by the income uncertainties."
"While stabilization and a modest turnaround in the export-driven manufacturing sectors have already taken place, we do not expect the stabilization of the labour market before the summer months, and no improvement before Q4 the earliest."
Hungary’s rate of unemployment leaped to a record high of 11.4% in the three month period between December 2009 and February 2010 from 10.8% in the previous three months.György Barta, CIB Bank, Budapest
The unemployment rate rose to a whopping 11.4% in the December-February period, well above the 10.8% rate previously seen. The favourable effects of the mild recovery in export-oriented production and inventory accumulation could have faded somewhat at the beginning of the year, along with fewer hirings taking place in services in the late winter season."
“The negative effects of the recession are still around, the 11.4% level is the highest since 1994. Just a year ago, the jobless rate had stood at a much lower 9.1%. The number of unemployed rose to 478,700 (101 thousand more than a year before), while the total number of people at work equalled 3.73 mln."
“The unemployment rate is expected to rise deeper into double-digit territory this year, as the labour market belatedly reacts to the deterioration in the country’s economic performance and the announced corporate layoffs (a trend also evident in Hungarian wage data)."
“The timing of the labour market turnaround is still uncertain, growth will probably be too slow during most of 2010 to create a sufficient number of new jobs (similarly to core markets, where labour market easing is also expected to continue well into this year, especially as fiscal stimuli fade away)."
“Also, Hungarian fiscal stimuli (e.g. public works contracts) provided to the labour market are weaker than elsewhere, given the strict budget constraints."
“The jobless rate could rise further during the first half of 2010, with a higher average jobless rate in 2010 than in 2009. It has also yet to be seen what the next government will do to decrease the proportion of the inactive population, seeing that opposition party Fidesz’s main priority seems to be job creation (which, in turn, could also widen the taxpayer base)."
Gábor Ambrus, 4Cast, Sofia
“Hungary's Dec-Feb U-rate jumps to 11.4% from 10.8% a month earlier and way above mkt 10.9% and 4Cast 10.8%. Market and us had expected that following the lay off waves of last year and this Jan the pace of job cuts would slow. Indeed, it did, (24K jobs destroyed in Feb vs 48.5K a year earlier) but the activity rate has tricked everyone: M/M activity was basically flat vs a steep decline expected, and hence the Feb jobs cuts were fully transmitted to the unemployment figures. To compare, lower activity absorbed around half of the unemployment shock a year earlier."
“True, ultimately it is just an 'accounting' phenomenon, depending on whether the freshly laid off are seeking or not seeking jobs, still the figures look ugly. The bottom line of today's U-stats is that the freshly unemployed are desperately trying to seek jobs - even more desperately than a year ago and this was the key reason why the U-rate surprised so strongly. The core of the workforce is still suffering heavily - bad news for growth, good news for inflation."
János Samu, Concorde Securities, Budapest
"The worsening reflects the fact that economic activity still lacks an important engine in Hungary. The domestic demand is held down partly by the scarcity of credit and to a larger part by the income uncertainties."
"While stabilization and a modest turnaround in the export-driven manufacturing sectors have already taken place, we do not expect the stabilization of the labour market before the summer months, and no improvement before Q4 the earliest."
