Macro View

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Febraury’s job data – Unemployment rate came down, while Active population is reaching new highs

Summing up – The unemployment rate went down 20bp to 6.8%m while the “Employed population” and the “Active population” keep growing. Over the last 12 months, unemployment increased by 67 000, while “Active population” increased 99 000 and “Employed population” +32 000. So the higher unemployment rate relates mainly with new people willing to work, instead of companies laying-off.

The unemployment rate increased 30bpMoM to 7.12%; 374 000;  more 19 600 people nevertheless it was mainly due to an increase in the Active Population, +43 600MoM, of which unemployed: 19 600MoM and Employed: 24 000MoM. In fact Active Population is at record levels at least for the last 12 years and the same is true regarding Employed population. So, more people looking for a job increasing the Active population, while Employed population is also increasing, apparently higher salaries are attracting people to the job market

The INE (Portuguese Statistic Institute) has just released February’s job market data, namely rate of unemployment, Under utilization rate, Employed population and Underutilization population (past data was revised downwards).    

The main highlights are the following:

1 – The Unemployment rate in February went down 20b MoM to 6.8% vs. 12MMA (12 month moving average): 6.2% and 3MMA 6.8%;

2 – The under-Utilization rate (takes in consideration the under-utilization population divided by a broad concept of Active population) went down 20bp MoM to 12% vs. 12MMA: 11.6% and 3MMA: 12.1%;

3 – The under-Utilization population (unemployed population + underemployed population + inactive population looking for a job but not available + inactive population available but not looking for a job) increased 9.3%YoY vs. 12MMA: -2.5% and 3MMA: +8.7%;

4 – The Inactive Population went down 3%YoY vs. 12MMA: -2.7% and 3MMA: -2.4%;

5 – Active population went up 1.9%; vs. 12MMA: 1.1% and 3MMA 1.3% (sequentially +30bp)  

6 – The Employed population went up 60bpYoY vs. 12MMA +1.3% and 3MMA 0.1% (sequentially: +53bp).

Our comments: the unemployment rate went down to 6.8%m while the “Employed population” and the “Active population” keep growing. In fact the unemployment rate is not lower, mainly because the “Active population” is reaching a record level almost 5.3Milions. The same is true regarding the “Employed population” +60bpYoY and 53bp MoM (4.92Mn). In fact, over the last 12 months, unemployment increased by 67 000, while Active population increased 99 000 and Employed population +32 000; so the higher unemployment rate relates mainly with new people willing to work, instead of companies laying-off.

Source: INE, AS Independent Research