Portuguese unemployment rate falls further

The data:

  • The unemployment rate fell in Portugal to 15.3% of the labour force in Q4 after 15.6% in Q3. A year ago, the unemployment rate was 16.9%.
  • Over the last twelve months, the number of unemployed has fallen by 84.6 thousand, thanks to a 21.8 thousand rise in employment and a 62.8 drop in the labour force, possibly due to migration, early retirement, discouragement, etc.
  • Employment was up 0.2%qoq in Q4 and 0.7%yoy, mostly thanks to female employment , up 0.4%.qoq and 1.2%yoy. The rise in net employment was solely due to the population between 35 and 64 years-old. In Q3, the biggest improvement was among 15-24 years old, possibly reflecting the Government’s active labour market policies oriented towards the recent graduates. The distribution by types of contracts shows a 2.1%qoq, 0.8% rise in permanent contracts. Temporary contracts are down 1.7%qoq but have been the fastest rising in the last twelve months, with 8.5%yoy growth in Q4.
  • The labour force which fell significantly over the last twelve months, remained broadly stable in Q4, with a slight 0.1%qoq decline.

Our comment:

These news are undoubtedly positive and point to a correction after sharper-than-expected drop in employment around the turn of 2012-2013. At the time, Macrometria had reported that the rise in the unemployment rate was more than what was justified by the recession. This time, the decline in the unemployment and rise in employment appears faster than what is warranted by the recovery. Further data is therefore required to better capture the trends in the labour market.