Israel’s labor market is still in good shape in historical terms, but the statistics over the past few months hint that the current high point of the past several years may be nearly over.
The Central Bureau of Statistics announced Wednesday that the number of jobs in Israel has remained nearly unchanged in the second quarter of 2019, after increasing by a mere 0.6% in the first quarter, in annualized terms. Annualized figures represent the change if the same pace continues for an entire year.
The summer months are usually characterized by a sharp increase in the number of jobs, but this year, the increase seemed to be smaller than usual.
The change in jobs isn’t uniform across all industries. Several industries expanded, such as information and communications – at an annualized pace of 3.3% in the first quarter and 3% in the second quarter.
Agriculture, fishing, health services, nursing and welfare jobs also expanded by an annualized pace of 2.8-2.9% in the second quarter. However, jobs in the arts, entertainment and leisure contracted by an annualized pace of 0.7% in the first quarter, and then 3.3% in the second quarter.
In total, there were 3.8 million jobs filled by Israelis as of June, a 1.4% increase from June 2018. Including foreign workers, the figure comes out to just over 4 million.
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The average wage in Israel is still increasing at a steady pace, but here, too, the figures are slowing. It increased by a 1.6% annualized rate in the second quarter, after adjusting for inflation, after increasing an annualized 2.3% in the first quarter.
Salaried Israelis earned an average of 11,175 shekels a month before taxes as of June 2019, a 2.9% increase in nominal terms from June 2018, and a 2.1% increase after adjusting for inflation.
Salaries in information and communications increased by 8% in nominal terms, and at an annualized pace of 2.9% in real terms from the previous quarter.
Food and service salaries increased by a pace of 3.9%, although salaries in these fields are still among the lowest in the country.
The monetary policy committee at the Bank of Israel stated last week that it still believes Israel’s workforce is “tight,” meaning the unemployment rate is low and there are few available jobs. However, while the Central Bureau of Statistics found that unemployment was near an all-time low in June, the labor force had also started to contract to its lowest level in years – a two-year low for workers aged 25-64, and a seven-year low for those 15 and up. This indicates that people are dropping out of the work force and not looking for jobs.
Alex Zabezhinsky, chief economist at the Meitav Dash investment house, noted that unemployment figures would be higher if people were not dropping out of the work force. Another signal that the labor market may be changing direction is a decrease in the number of available jobs. The figure decreased by an annualized 3.3% in the second quarter of 2019, to 97,000. Some 3.51% of jobs were available. The figure is calculated based on the number of occupied jobs plus the number of available jobs.