Cautious Optimism on Unemployment

Are there signs of an improvement on the jobs front? Yesterday the Employment Service released new figures showing demand for new workers was up 7.5% last month compared to May 2008. Compared to April of this year, the jump is much higher: 33%.

The director general of the Employment Service, Yossi Farhi, expressed cautious optimism, as the total demand for workers in the first five months of 2009 was still 6.7% below the same period of last year. In addition, the number of jobseekers in May fell 1.5%, with 230,000 people looking for work through the service - down from 234,000 in April.

The number of workers who lost their jobs in May was 14,500, lower than the 18,300 monthly average for November 2008 through March 2009. The number of college graduates who were dismissed dropped significantly - just 2,010 in May, compared to 3,892 in March.

Another positive sign came from the Ministry of Industry, Trade and Labor, which forecasts an improvement in the labor balance in the second quarter - the number of those getting jobs compared to the number losing them. The figure will still be negative, meaning more people are losing their jobs, but it will shrink from a negative 32,000 jobs in the first quarter to only 7,000 net job losses in the second quarter.

The main improvement stems from fewer people losing their jobs, and not more finding new ones. In particular workers are simply not leaving their current jobs out of fear they will not find new ones, while employers are firing fewer people - for now.