In an unexpected turn of events, the Czech Republic’s unemployment rate climbed to 3.9% in September, marking a 0.1 percentage point increase from the previous two months. The Labor Office reports that this rise is primarily attributed to an influx of approximately 3,000 fresh graduates entering the job market.
As of September’s end, the number of unemployed individuals reached 290,905, a rise of 4,585 from August. Interestingly, the number of job vacancies also increased by 1,400, totaling 264,654. Year-on-year comparisons reveal a more concerning trend: nearly 28,000 more people are jobless, while over 17,000 fewer job openings exist.
Pavel Sobíšek, chief economist at UniCredit Bank, noted that this September increase is historically significant, being the second-highest for the month, surpassed only marginally by 2022’s figures. He attributes this rise to a weak economic performance leading to staff reductions in some manufacturing plants, reduced seasonal work impact, and a delayed entry of fresh graduates into the job market compared to previous years.
Vít Hradil, chief economist at Cyrrus, points out that September typically sees a slight decrease in unemployment due to the start of the school year. This unusual increase likely signals a continued cooling of the job market. The current 291,000 job seekers represent the highest September figure since 2016, possibly reflecting the ongoing two-year slowdown in the industrial sector.
Regionally, the Ústí Region recorded the highest unemployment rate at 6.2%, while Prague maintained the lowest at 2.9%. The Most, Karviná, and Chomutov districts face the highest unemployment rates, contrasting sharply with the Prague-East, Prague-West, and Plzeň-South districts.
Looking ahead, ČSOB analyst Dominik Rusinko predicts that unemployment will continue to rise slightly by the end of the year, potentially exceeding 4%. This increase is expected due to the end of seasonal work, although the approaching holiday season may offset this trend with increased demand in logistics and e-commerce sectors.