Unemployment rate continues to rise in July

  • ECO News
  • 31 August 2020

More jobs were created in July, but the unemployment rate rose to 8.1%, up 0.8 percentage points from the previous month.

The summer has halted the job destruction caused by the pandemic. The employed population increased by 0.1%, according to provisional data released on Monday by the National Institute of Statistics (INE). Even so, the unemployment rate rose again, to 8.1% in July.

The employed population also increased, 0.1% (2.7 thousand) in July, compared to June, when employment had already increased. “The transition from a state of emergency to a state of calamity and, since July, to a state of alert, for the generality of the country, dictated some normalization of the labour market due to the easing of restrictions on people’s mobility and business activity and had expression in the results of monthly employment and unemployment statistics,” INE points out.

Despite these positive developments, the unemployment rate has increased again. It stood at 8.1% in July, 0.8 percentage points more (p.p.) than in the previous month.

As for the rate of under-utilization of labour, an indicator “more comprehensive than the official unemployment rate,” stood at 15.7% in July. This figure translates into a monthly increase of 13,000 people, “which was totally explained by the increase in unemployment (39.4 thousand) and in underemployment of part-time workers (12.4 thousand), given that the number of persons seeking work but not available and of persons available to work but not seeking have both decreased (by 6.0 thousand and 32.9 thousand, respectively),” explains INE.

During the initial months of the pandemic, the number of inactive people disguised the unemployment, but now the official figures are becoming clearer, notably with the end of the restrictions, which prevented unemployed people from being available to work or seek work.

This situation already started to be visible in June, when the unemployment rate rose to 7.3%, a figure revised upwards by INE to 7% in the provisional figures. The INE estimates that in July, the unemployed population was 409,700, 10.6% more than in the previous month.