Employment decline continues amid modest outlook

Despite a continued downturn in employment figures, the overall situation remains manageable given the broader economic challenges, according to Pellervo Economic Research (PTT) Senior Economist Henna Busk. Recent data from Statistics Finland reveals

By: helsinkitimes.fi

May 22 2024
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Employment decline continues a

Despite a continued downturn in employment figures, the overall situation remains manageable given the broader economic challenges, according to Pellervo Economic Research (PTT) Senior Economist Henna Busk.

Recent data from Statistics Finland reveals a concerning 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 figures do not yet indicate a clear economic recovery, the labor market typically lags behind economic trends. Thus, improvements in employment might not be evident until some time after the economy begins to grow.

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

The uptick in layoffs appears to have halted, suggesting a potential stabilization in the labor market, though this will become clearer in the coming months.

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

YTK, Finland's largest provider of earnings-related unemployment benefits, reported that the unemployment rate among its members in April was up from 7.9% in March. This is a notable increase from the 6.9% rate recorded in April of the previous year.

The rise in April is atypical, as unemployment usually decreases in the spring. YTK's members have experienced higher unemployment levels throughout the year compared to last year.

In April, YTK paid out €79 million in daily allowances, a nearly €5 million increase from March, reflecting the persistently high unemployment rate.

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

Although April's unemployment rate remains high, the number of new applications has started to decline in early May. Typically, the unemployment rate drops in the spring, but this year the decrease is smaller and occurring later than usual.

"Layoffs appear to be concluding, and the significant change is the reduction in follow-up applications from those who are fully unemployed. Many applicants seem to be finding employment as summer approaches," Hänninen explains.

Furthermore, part-time employment has decreased slightly, while full-time employment has seen a corresponding increase.

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