Unemployment in the Czech Republic rose to 3.9 percent in January from 3.7 percent in December. There were 283,059 unemployed people. This is already more than the number of vacancies, of which employers offered 281,141 at the end of the month. It was the first time that had happened in almost five years. This is according to data published on Wednesday by the Labour Office of the Czech Republic (ÚP ČR).
Last January, the unemployment rate was 3.6 percent. At that time, 267 000 people were looking for a new jobs, and almost 352 000 vacancies were available.
According to Viktor Najmon, director general of the ÚP ČR, employers are more cautious in hiring new workers this year. They also focus on building financial reserves more efficiently due to more expensive energy or raw materials. The number of vacancies fell by about 7,500 in a month.
“Still, despite January’s increase, the jobless rate remains relatively low. Unemployment could stagnate or rise slightly in the coming months. It could then fall as spring weather arrives and seasonal work starts to pick up,” Najmon said.
Labor and Social Affairs Minister Marian Jurečka (KDU-ČSL) said the ministry is closely monitoring the development of the number of people without jobs and the number of vacancies. “Although we are now witnessing a slight increase in unemployment, this is a usual phenomenon at the beginning of the year,” he said. He pointed to a survey showing that eight out of 10 large employers are still looking for new workers, and two-thirds of them are also planning wage increases.
The rise in the number of people out of work is not necessarily bad news, according to Citfin’s chief analyst, Tomáš Volf. “The domestic labor market has been overheated for a long time, and companies have struggled to find suitable employees for more than a year, across regions and industries. A rise in unemployment could relieve some of this pressure and allow the labor market to clear,” he said.
Akcenta analyst Miroslav Novak said that despite the improving economic outlook, it is probably necessary to expect a gradual rise in unemployment well above 4 percent this year. “On the positive side, there is at least no indication that there will be a sharp rise in unemployment and a dramatic decline in job openings, as was the case after the financial crisis in 2008,” he said.
In January, the st nad Labem region had the highest unemployment rate, at 5.8 percent. The Moravian-Silesian region followed with an unemployment rate of 5.2 percent. “These regions also had the highest share of unemployed people last year. This corresponds to their long-term economic situation,” according to the Labour Office. On the other hand, the lowest unemployment rates were in the Zlín Region, Prague, Pardubice, and Plzeň Regions, with 3.1 percent.
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