Unemployment rate rises dramatically to 6.9%

Rate rises 0.4% from last month; labor force has also expanded, at least partially accounting for unemployment hike.

By GLOBES
Haredi man working 370 (photo credit: Baz Ratner/Reuters)
Haredi man working 370
(photo credit: Baz Ratner/Reuters)
The unemployment rate in Israel rose significantly in March, to 6.9% of the labor force, compared with 6.5% in February, the Central Bureau of Statistics reported Monday. This represents 246 thousand unemployed people. The good news is that alongside the growth in unemployment, the labor force (the number of people in work or seeking work) has also grown, accounting for part of the rise in the unemployment rate.
This is the first time that the Central Bureau of Statistics has reported in accordance with the calculation method imposed by the OECD, which instantly increased the number of unemployed by 30%. Nevertheless, there has been substantial deterioration.
At the end of March, the Central Bureau of Statistics sent shockwaves through the economy when it announced that, as a result of the change in the calculation method, the unemployment rate in Israel was not 5.4% (the figure for the end of 2011), but 6.5%. A person is defined as unemployed if he or she is over 15 years old and wishes to work but cannot find a job.
Following the change in the calculation method, which ought to have reduced the unemployment rate since it includes regular and career soldiers (who are all employed), a senior economic official in Jerusalem told "Globes" of the shock that seized Israel's leadership when they became aware of the change. "We're also in shock, and cannot understand the change. Governor of the Bank of Israel 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," he said at the time.