Portugal: January’s job data – The job market in January remained tightened, unemployment rate at 5.6% in line with 3MMA. The more restrictive migration policies should slow down Active population growth, while unemployment rate could reach new lows

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Summing up, the job market in January remained tightened, Active population growth is, apparently slowing down (+1.8%YoY, below moving averages), however fortunately Employed population also grew at a slower pace (2.6%YoY), so the unemployment rate was stable monthly at 5.6%. The restrictive migration policies should slowdown the Active population growth, and unemployment rate, in the coming months, could reach new lows.

The INE (Portuguese Statistic Institute) released yesterday January’s job preliminary data, namely Rate of Unemployment, Under Utilization Rate, Employed Population and Underutilization Population (we were not able to comment yesterday, sorry for any inconvenience).    

The main highlights are the following:

1 – Unemployment rate in January 5.61% (+3bpMoM); compares with 12MMA (12 months moving average): 5.98% and 3MMA: 5.62%;

2 – The Under-Utilization rate (takes in consideration the under-utilization population divided by a broad concept of Active population) was almost flat MoM at 9.64%; compares with 12MMA: 10.19% and 3MMA: 9.71%;

3 – The Inactive Population went down -176bp YoY vs. 12MMA: -178bp and 3MMA: -148bp (-36bpMoM);

4 – Th Active population went up 1.8%YoY vs. 12MMA: 2.77% and 3MMA 2.39% (-85bp MoM):  

5 – The Employed population went up 2.62%YoY vs. 12MMA +3.29% and 3MMA 3.28% (-95bp MoM).

Our comments: the job market, in January, remains tightened, the Active population growth slowed down, +1.8%YoY below moving averages, which could be a signal of lower foreign people available, meanwhile, fortunately, the employed population growth, also slowed down, so unemployment rate was almost stable at 5.61%, below 12MMA and in line with 3MMA.We believe the Active population should continue to grow at a slower pace, due to more restrictive immigration policies, so the unemployment rate, in the coming months, could reach new lows.         

Source: INE, AS Independent Research