Israeli unemployment fell to 4.8% of the workforce last months, it lowest level in 33 years even as economic growth has been slowing.
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The Central Bureau of Statistics said Thursday that the decline followed a sharp drop from 5.3% in March to 4.9% April and made May the lowest month for joblessness in Israel since 1983, when it averaged 4.5% for the year.
The jobless rate is not only low historically but low by international standards, and by conventional economic definitions there’s no unemployment at all in Israel. That is because economists assume that at a given time about 4.8% of a country’s labor force is between jobs.
A few countries belonging to the Organization for Economic Cooperation and Development had lower rates than Israel’s in April -- among them the United States with 4.7%, Japan with 3.2% and Germany with 4.2% – but the average for the OECD for the month was 6.4% and for European Union countries 8.7%.
The record low jobless rate comes amid slowing growth for the Israeli economy. Although the CBS revised higher its estimate for the first quarter last week, the annualized rate of expansion was still a tepid 1.3%.
However, as exports have been dropping sharply, growth has been propped up by high levels of consumer spending, which have been fueled by declining unemployment and rising wages. Two weeks ago, the CBS said the average monthly wage for Israelis reached 10,128 shekels ($2,645 at current exchange rates) in March, with hourly wages rising at a 5.2% annualized rate in the first there months of the year.
Israel’s labor force participation rate – the percentage of working-age people either holding a job or actively seeking one – fell slightly in May, running against a long-term trend towards more Israelis joining the workforce.
Overall, the participation rate for people age 15 and over edged down 0.1 percentage point, to 64.3%, as the rate for men rose 0.2 points to 69.4% and the rate for women fell 0.4 points to 59.4%. However, in the key 25-64 age group, the participation rate held steady at 80.4%.
Among men, the unemployment rate fell to 4.7% from 4.8% in April, while among women the rate dropped 0.2 percentage points to 4.9%.