- Hans Weber
- December 1, 2023
For the first time in five years, more people are out of work than jobs available.
According to the Labour Office of the Czech Republic, the unemployment rate in the country has increased to 3.9 percent in January from 3.7 percent in December. This means that there are now more people without jobs than there are vacancies available, which has not happened in five years. The number of unemployed people has risen to 283,059 while the number of vacancies is at 281,141. This rise in the number of people out of work is due to the cautious hiring behavior of employers and their focus on building financial reserves.
Employers are said to be more cautious in hiring workers this year, and the number of vacancies has decreased by 7,500 in a month. Despite the increase in unemployment, the jobless rate remains relatively low, and it could rise slightly in the coming months before declining as the spring weather arrives and seasonal work picks up. The labor and social affairs minister, Marian Jurečka, is closely monitoring the development of unemployment, and a survey has shown that eight out of 10 large employers are still looking for new workers, with two-thirds planning wage increases.
According to Citfin’s chief analyst, Tomáš Volf, the rise in unemployment could be a positive thing as the domestic labor market has been overheated for a long time, and companies have struggled to find suitable employees. A rise in unemployment could relieve some of this pressure and allow the labor market to clear. An analyst from Akcenta, Miroslav Novak, also believes that despite the improving economic outlook, it is necessary to expect a gradual rise in unemployment well above 4 percent this year.
In terms of regional unemployment rates, the St nad Labem region had the highest rate at 5.8 percent, followed by the Moravian-Silesian region with an unemployment rate of 5.2 percent. These regions also had the highest share of unemployed people last year, which is said to correspond to their long-term economic situation. On the other hand, the lowest unemployment rates were in the Zlín Region, Prague, Pardubice, and Plzeň Regions, with 3.1 percent.
In conclusion, the rise in unemployment in the Czech Republic could be seen as a positive development, as it could relieve some of the pressure from the overheated domestic labor market. However, it is necessary to monitor the situation closely, as unemployment rates could rise slightly in the coming months before declining. The labor and social affairs minister is said to be closely monitoring the development of unemployment, and a survey shows that many employers are still looking for new workers and planning wage increases.
Article by Prague Forum