The Central Bureau of Statistics has stunned Israel's political and business community by indirectly admitting that its method for measuring unemployment is not the accepted methodology used by the OECD. Starting this year, it must calculate the unemployment rate on the same basis as used by the rest of the OECD's members. As a consequence, Israel's unemployment rate - one of the most important macroeconomic figures, along with GDP growth - has jumped 20 percent.
Israel joined the OECD in late 2010, and must update and amend its method for measuring unemployment. According to the Central Bureau of Statistics, the unemployment rate was not 5.4% at the end of 2011, but 6.5%. The Central Bureau of Statistics announced on February 28 that the average unemployment rate in 2011 was 5.6% of the civilian labor force, or 174,000 unemployed persons. That figure has now been revised to 227,000. An unemployed person is defined as a person aged 15-64 who is seeking work, but is not working (cannot find a job).
A top economic official in Jerusalem told "Globes" about the shock among Israel's economic leaders who received the news a few days ago. "We're also in shock, and cannot understand the change. Governor of the Bank of Israel Professor Stanley Fischer saw the numbers and is demanding explanations. He hasn’t yet received them, and he does not find what he was told convincing." A top Bank of Israel source admitted that he did not understand the change either.