12.09.2023

IS THE LABOR MARKET SITUATION WORSENING?

The first signs that the positive trends in the labor market, observed in the last two years, have begun to weaken, show the data from the Labor Force Survey, in the second quarter of 2023. This is indicated in an analysis by the Ministry of Finance.

Although the second quarter is traditionally characterized by increased seasonal labor demand, the data show a decrease in employment on a quarterly basis (by 0.5%) and remaining at an almost unchanged level compared to a year earlier.

At the same time, in the second quarter of 2023, the unemployment rate in the country was 4.6%, increasing both on a quarterly basis (by 0.2 percentage points) and on an annual basis (by 0.1 percentage points). Data on the registered unemployed showed that this process may continue in the third quarter, although this is traditionally the period with the lowest unemployment within the calendar year.

Wages

In the second quarter of 2023, average wages rose by a nominal 13.1% year-on-year, slowing from the reported growth of 17.3% in the first quarter.

Current developments reflected the lower growth rate of the indicator in both the private and public sectors, at 14.1% and 10.1%, respectively.

The most significant contributors to the observed slowdown in wage growth, not only compared to the previous quarter but also compared to a year ago, were reported in trade (12.9%), government (7.8%), education (7.4%) and financial and insurance activities (6.4%).

With inflation contained, real labor income growth, deflated by the Harmonized Index of Consumer Prices, continued to accelerate to 4% on an annual basis.