30/8/2014: Both Unemployment and Participation Rates Fell in Q2 2014

In the previous post, I covered duration of unemployment across age cohorts data for Q2 2014. This time around, let's take a look at labour force participation rates and unemployment rates.

As noted earlier, there are some good news in the latest QNHS data. And this theme continues with unemployment rate statistics.

Official unemployment rate has declined from 12% in Q1 2014 to 11.5% in Q2 2014 (seasonally-adjusted basis). Thus, Q/Q unemployment rate dropped by a substantial 0.5 percentage points, which is faster than the 0.2%points decline in Q1 2014 compared to Q4 2013. It is worth noting that in Q2 2013, Q/Q decline in seasonally-adjusted unemployment rate was shallower 0.1 percentage points. Overall, over H1 2014, unemployment rate declined by 0.7 percentage points compared to the end of 2013. Over the same period of 2013, decline was 0.6 percentage points.

Without seasonal adjustment, things are slightly different. Y/Y Q2 2014 unemployment rate is down 2.1 percentage points and in Q1 2014 the same decline was 1.7 percentage points. These rates are faster than the rates of y/y declines in unemployment for the same period of 2013.

All of which is good news as illustrated by the chart below:

Things are not as good on the participation rates front, however.

Non-seasonally-adjusted Participation Rate fell from 60.5 in Q2 2013 to 60.0 in Q2 2014. H1 2014 average participation rate was 59.85 against H1 2013 average of 60.0, H1 2012 average of 59.9 and H1 2011 average of 60.1, in H1 2010 the average was 60.8, in H1 2009 it was 62.2 and so on... Q2 2014 participation rate was lower than Q2 2011 reading of 60.5. By all metrics, participation rate has fallen and not just y/y, but also compared to other periods of the crisis.

On seasonally-adjusted basis, Participation Rate also fell, from 60.1 in Q1 2014 to 59.8 in Q2 2014. This marks the lowest Q2 participation rate since Q2 2000. Last time seasonally-adjusted participation rate expanded in Ireland was in Q2 2013.

Chart below to illustrate:

As chart above illustrates, the bad news is that participation rate is not growing and is basically flat since Q2 2011. Worse news is that it is now matching the crisis period low. Even worse things is that the participation rate is running below historical trend in every quarter since Q2 2010. Guess those higher taxes, as well as high cost of childcare for families, are keeping people out of the labour force (remember, labour force includes employed and unemployed workers who are searching for a job).

Or by definition: The labour force participation rate is computed as an expression of the number of persons in the labour force as a percentage of the working age population. The labour force is the sum of the number of persons employed and of persons unemployed.

So in basic terms, of every ten persons of working age, six are either employed or unemployed, and four are neither working nor seeking a job. At the peak of the Celtic Tiger, the ratio was 6.4 to 3.6.

12/12/2011: QNHS Q3 2011 - Take 2

Another quick note on the QNHS latest data:

• Total labour force is now down 147,600 on peak levels
• Total employment is down 346,800 on peak levels
• The demographic dividend is bust.

Table of sectoral changes to summarize latest data (note, public sector data is from the main QNHS, so it is less accurate than data reported in previous post):

Notable differences arise in terms of part-time and ful-time employment changes. relative to pre-crisis levels, full-time employment is down 21.5% while part-time employment is up 9.6%. Thus, overall quality of employment is deteriorating rapidly. But while yoy full-time employment is being displaced by part-time employment -3.69% to +1.76%, qoq both part-time and full-time employment is shrinking.

Relative to pre-crisis levels, employment is down in all sectors except Transportation & Storage (+3.28%),  ICT (+9.35%),  Education (+3.02%), and Human Health and Social Work Activities (+9.46%).

Overall number in employment is down 15.82% on pre-crisis levels. Meanwhile, of sectors that posted declines in employment over the same period:

• Largest declines were recorded in the collapsed Construction (-59.53%), in the allegedly-booming Agriculture, forestry and fishing (-28.9%) and Industry (-23.25%). 
• In addition, Administrative and support services (-20.25%) and Accommodation and food service activities (-18.01%) posted deeper than average cuts.
• Shallow cuts were recorded in Financial, insurance and real estate activities (-6.12%) and Public administration and defence; compulsory social security (-5.45%)

12/12/2011: QNHS Q3 2011

Headline unemployment number out of QNHS for Q3 2011 is at 14.4% up on 14.2% in Q2. This is bad, but not as bad as two other core labour market performance parameters.

On a seasonally adjusted basis, Irish employment fell by 20,500 (-1.1%) in Q3 2011. This follows on from a seasonally adjusted fall in employment of 4,100 (-0.2%) in Q2 2011 - an acceleration of 5-fold!

Unemployment increased by 15,700 (+5.3%) in the year to Q3 2011 and the total number of persons unemployed now stands at 314,700.

Meanwhile, the long-term unemployment rate increased from 6.5% to 8.4% over the year to Q3 2011. Long-term unemployment accounted for 56.3% of total unemployment in Q3 2011 compared with 47.0% a year earlier and 25.5% in the third quarter of 2009.

The total number of persons in the labour force in the third quarter of 2011 was 2,120,300, representing a decrease of 30,200 (-1.4%) over the year. This compares with a labour force decrease of 51,800 (-2.4%) in the year to Q3 2010.

Charts to illustrate the above:

Adding to this emigration, the above chart paints the picture of mass-exodus from the labour force, most likely due to twin effects: layoffs and tax increases.

Now, updating figures for public v private sector employment:

 CSO provides more accurate, by their own admission, figures for public sector employment in the Table A3 of the QNHS release. Here is the summary, excluding temporary Census 2011 staff:

• Civil service employment in Q3 2011 stood at 39,900, up on Q1 2011 39,500 reading and unchanged on Q3 2010. In Q3 2008 the same number stood at 43,000 so net reductions on pre-crisis level are 3,100 or 7.2%.
• Total public sector excluding Semi-State bodies stood at 339,900 in Q3 2011, down 8,400 on Q3 2010 and 5.6% lower than in Q3 2008.
• Total public sector employment including Semi-State bodies is now at 392,900, down from 399,000 in Q1 2011 and down 8,200 on Q3 2010. Compared to Q3 2008, public sector total employment is down 24,000 or 5.8%.
• Total private sector employment is at 1,123,600, down from 1,147,800 (-2.1%) year on year and down 194,800 on pre-crisis levels or -14.8%.

So to summarize - public sector employment is down 5.8% relative to pre-crisis levels, while private sector employment is down 14.8%.