The Czech unemployment rate fell again in June by 0.1 percentage point (pp) month-on-month to 3.1% (chart). The number of people searching for jobs in June stood at 231,309, the Labour Office reported. The employers have offered more than 319,000 vacancies, down by 18,000 m/m.
"The long-term very low unemployment rate in the Czech Republic is a very important and positive indicator. Our labour market is able to offer employment to everyone who wants to work. This has been clearly demonstrated in recent months in connection with the war in Ukraine. Almost 85,000 refugees have found work in our country and have ceased to be dependent on state aid," claimed Marian Jurecka, Minister of Labour and Social Affairs.
The lowest unemployment rate was posted in the Pardubice Region (2.1%), while the Usti nad Labem Region reported a rate of 4.9%, the highest in the Czech Republic.
"In June, the unemployment rate reached the level of January 2020, just before the outbreak of the coronavirus pandemic," commented Cyrrus analyst Vit Hradil for the Czech News Agency. According to him, the June drop is largely a standard calendar phenomenon, as seasonal work is already in full swing and the fresh batch of graduates looking for jobs has not yet arrived on the labour market. He does not expect a further decline for the rest of the summer.
"Overall, unemployment is close to its bottom and is expected to turn to a slight upward trend in the final months of this year," said Jana Steckerova, an analyst at Komercni Banka. "Disproportionately high input prices are already weighing on companies and customers, holding back hiring. I expect the share of unemployed to average at 3.3% for this year and 3.5% next year," she added.
The question is which direction the labour market will continue to develop, said Deloitte analyst Vaclav France. "We have hundreds of thousands of migrants from Ukraine and the recession is around the corner … If gas supplies to Germany did not resume after the summer shutdown of the Nord Stream 1 pipeline, a deep recession would be inevitable and with it a rise in unemployment. The year 2022 could thus be a major turning point in the labour market," he added.