Unemployment in Israel: August data gives mixed picture

The broad unemployment rate in Israel reached 7.8 percent in the second half of August — An improvement for the first half of August, but a decline from July.

A beggar sits and asks for money amid the coronavirus crisis, Jerusalem, 2020 (photo credit: MARC ISRAEL SELLEM)
A beggar sits and asks for money amid the coronavirus crisis, Jerusalem, 2020
(photo credit: MARC ISRAEL SELLEM)

Is Israel’s unemployment rate improving, or has it plateaued? It depends on how you look at it.

On Sunday, the Central Bureau of Statistics (CBS) reported that the broad unemployment rate reached 7.8% in the second half of August, an improvement from 8.1% in the first half of the month, but worse than the 7.6% it reported for the second half of July.

The unemployment rate for the two-week period, not including those on unpaid leave or those seeking work since the beginning of the coronavirus pandemic, increased to 5.6%, from 5.3% in the first half of August. There were some 330,000 job seekers at the end of August, compared to 323,000 job seekers as of the end of July.

Meanwhile, there are plenty of job openings available. Last week, CBS reported that there were 134,237 job vacancies available in Israel, several thousand more than a month earlier. Happily, the number of job vacancies in the food and hospitality sector, one of the hardest-hit areas of the economy, declined for the first time in a year.

However, many job seekers have not been in a hurry to take new work. Some of the reasons may be seasonal, with people preferring to wait to start a new job until after the holidays, or until rising coronavirus infection rates subside somewhat. However, economists fear that some parts of society may have gotten stuck in a cycle of chronic unemployment.

 Israeli self-employed protest the lack of financial support from the Israeli government in times of Corona, when many find themselves unemployed, on Rothschild Boulevard in Tel Aviv, July 7, 2020.  (credit: MIRIAM ALSTER/FLASH90) Israeli self-employed protest the lack of financial support from the Israeli government in times of Corona, when many find themselves unemployed, on Rothschild Boulevard in Tel Aviv, July 7, 2020. (credit: MIRIAM ALSTER/FLASH90)

Israel's unemployment rate reached as high as 16% at the beginning of the pandemic, and officials have worked hard to build momentum for its economic recovery since coming out of its third lockdown in April. After showing rapidly improving numbers earlier in the summer, economists are divided as to whether stagnating growth is a cause for concern.

Following Sunday's report, Prime Minister Naftali Bennett said the data proves that the decision to avoid a national lockdown was a correct one.

"When the country is open, unemployment goes down," Bennett commented. "We still have a long way to go: hundreds of thousands who have lost their jobs expect us not to succumb to the mentality of sweeping and destructive closures and restrictions, but to persevere in a policy of living alongside the corona, and finding solutions instead of hurting livelihoods. That is what we are doing and we will continue to do it."