Unemployment falls to 8.9 percent in Q3

Israel's unemployment rate fell to a seasonally adjusted 8.9 percent in the third quarter with 245,000 individuals out of work, down from 9.1% in the second quarter and 9.2% in the first, the Central Bureau of Statistics said Monday. This is the first time unemployment has dropped below 9% of the country's workforce since the second quarter of 2001. The figure has been falling steadily from a 10.9% peak in November and December 2003, but had stayed at 9.1% from March to August. "But what's surprising is that unemployment has stayed so high," said Israel Institute for Economic Social Research chairman Roby Nathanson, arguing that the government must work towards a target of a "structural unemployment rate of 3%-4%." Nathanson also attacked Bank of Israel Governor Stanley Fischer's decision Monday to raise the interest rate 0.5 percentage point to 4.5%. "Such an interest rate will not allow us to bring down unemployment. There is absolutely no reason at present to halt growth and move into a policy of restraint," he said. Nearly 1.65 million people were working in full-time positions (35 hours or more) in seasonally adjusted terms, 0.4% more than in the second quarter, while the number of part-time workers rose 0.8% to 689,700. The large number of parttime workers is a "direct result of cuts to income guarantee allowances," Nathanson said, stressing that though statistics will then indicate that welfare recipients are entering the workforce, the real result is a rise in the numbers of working poor. Fully 144,000 were working part-time against their will - having sought fulltime work or additional jobs in vain - constituting 5.8% of all employed, up from 5.6% in the second quarter. The average number of hours worked dropped to 37.0 per week, from 37.3 in the second quarter. The 2,745,000 participants in the workforce - whether working or unemployed - constituted 55.2% of the population, the same level as in the second quarter, but up from 54.9% in the first quarter of the year. Nathanson stressed that Israel's low workforce participation rate is of greater concern than the country's unemployment rate. "We need to pay attention to this problem, since we are being hurt by it in the long term," he said, adding that the government could do more to encourage women, haredim, welfare recipients, the disabled and others to join the work force. The percentage of men participating in the workforce rose to 60.9%, from 60.6% in the second quarter, while among women, the rate of participation in the workforce fell to 49.7% from 50.1%. Unemployment among men rose to a seasonally adjusted 8.6%, from 8.4% in the second quarter, while 9.3% of women participating in the workforce were unemployed, down from 9.8%. Unemployed are defined as those who did not work even one hour in the week surveyed, despite having actively sought employment for at least the previous four months, and would start working that week if offered an appropriate job.
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