Employment decline continues amid a modest outlook

Despite a steady decline in employment figures, the overall situation remains manageable given the broader economic challenges, according to Pellervo Economic Research (PTT) senior economist. Henna Busk.

The latest data from Statistics Finland reveals a worrying trend: the number of employed individuals aged 15-74 in April 2024 was 17,000 less than the same period last year, while the number of unemployed increased by 41,000.

Busk notes that while these numbers do not yet indicate a clear economic recovery, the labor market typically lags behind economic trends. Thus, improvements in employment may not be apparent until some time after the economy begins to grow.

Long-term unemployment has shown a slight increase, which Busk attributes to broader employment trends. However, she points out that the increase is not too great.

The increase in layoffs appears to have stalled, suggesting a possible stabilization in the labor market, although this will become clearer in the coming months.

According to data from the YTK Unemployment Fund, the unemployment rate among its members rose to 8.4% in April, an unusual increase for this time of year. However, the filing numbers in early May suggest that unemployment will fall this month. The figures show a shift from part-time to full-time employment.

YTK, Finland’s largest provider of income-related unemployment benefits, reported that the unemployment rate among its members in April had risen from 7.9% in March. This is a marked increase from the 6.9% rate recorded in April a year ago.

The increase in April is atypical, as unemployment usually declines in the spring. YTK members experienced higher levels of unemployment throughout the year compared to last year.

In April, YTK paid 79 million euros in daily allowances, an increase of nearly 5 million euros from March, reflecting the high unemployment rate.

Unemployment among men remains significantly higher than among women within the YTK membership. CEO of YTK Auli Hänninen attributes this disparity to ongoing struggles in the male-dominated construction industry, which is recovering more slowly than other sectors.

Although the unemployment rate in April remains high, the number of new applications began to decline in early May. Typically, the unemployment rate falls in the spring, but this year the drop is smaller and later than usual.

“The layoffs seem to be ending and the important change is the reduction in follow-up applications from those who are completely unemployed. Many applicants seem to be finding work as the summer approaches,” Hänninen explains.

Moreover, part-time employment has registered a slight decrease, while full-time employment has registered a corresponding increase.

“This positive trend shows a gradual improvement in the employment situation, even though the overall unemployment rate remains high,” concludes Hänninen.

HT

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