40,000 jobs in jeopardy by year-end

Economists expect the unemployment rate to reach 9%; participation rate in labor market continues to rise in first quarter 2009, reaching a high of 56.8%.

By SHARON WROBEL
June 4, 2009 21:42
2 minute read.
40,000 jobs in jeopardy by year-end

jerusalem unemployment line 88 248. (photo credit: Ariel Jerozolimski [file])

 
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Despite indications that the escalating number of job seekers is starting to slow down, some economists expect the unemployment rate to reach 9 percent by the end of the year, meaning another 40,000 workers might lose their jobs. "Looking ahead, we see unemployment continuing to rise during the course of the year, reaching about 9% by the end of the year," Gil Bufman, chief economist at Bank Leumi, said Thursday. "We expect the average monthly unemployment rate for this year to stand at 8.1%, due to a sharp drop in the number of employed people - not seen since 2003 following the recession - and the continued increase in the number of job seekers." The participation rate in the labor market continued to rise, particularly among women, in the first quarter of this year, reaching a high of 56.8%, which is still lower than the average rate of 62% in developed countries, he said. "There is a rising trend for participation in the labor market, despite the fact that the economy is in a recession," Bufman said. "As the participation rate continues to rise in Israel, so does the need for suitable employment solutions." According to the Central Bureau of Statistics, 35,000 workers lost their jobs in the first three months of the year, boosting the rate of unemployment of the civilian labor force to 7.6%, or 228,000, from 6.5% in the previous quarter. The Bank Leumi unemployment forecast would bring the number of unemployed close to 270,000. The Employment Service reported that the number of new job seekers registered during April indicated a rising trend, albeit at a slowing pace. "We expect the rate of unemployment to continue to rise over the next couple of months, to 8.5% by the end of this year," Bank Hapoalim economists reported Thursday. "The good state of the labor market has until now been able to withstand external shocks, but the sharp increase in the rate of unemployment and salary cuts are expected to hurt private consumption and delay the recovery from the crisis." New claims for unemployment benefits fell 5% to 18,600 in May, from 19,661 in April, the National Insurance Institute reported Wednesday. But in comparison with the same month last year, new claims for unemployment benefits rose 60%. The number of claims for unemployment benefits grew to 92,000 in May, from 88,500 in April. The NII attributed the increase to a deepening crisis in the labor market, since it is taking the unemployed more time to find jobs.

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