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Summing up, the job market in May strongly improved, Employed Population reached new highs, growing 2.8%YoY/+36bpMoM above the Active population performance, so unemployment rate went down to 5.54%; clearly below moving averages. The new migration policy could be impacting the Active population and assuming the economy remains robust, the unemployment rate, in the coming months, should reach new lows.

The INE (Portuguese Statistic Institute) has just released May’s job preliminary data, namely Rate of Unemployment, Under Utilization Rate, Employed Population and Underutilization Population.    

The main highlights are the following:

1 – Unemployment rate in May 5.54% (-15bpMoM); compares with 12MMA (12 months moving average): 5.83% and 3MMA: 5.70%;

2 – The Under-Utilization rate (takes in consideration the under-utilization population divided by a broad concept of Active population) went down 28bp MoM to 9.39%; compares with 12MMA: 9.89% and 3MMA: 9.63%;

3 – The Inactive Population went down -276bp YoY vs. 12MMA: -221bp/3MMA: -237bp (-19bp MoM);

4 – The Active population went up 2.10%YoY vs. 12MMA: 2.60%/3MMA 1.97% (+19bp MoM):  

5 – The Employed population went up 2.80%YoY vs. 12MMA +3.22%/3MMA 2.57% (+36bp MoM).

Our comments: the job market, in May, strongly improved, unemployed people are reaching new lows, while Employed population is reaching a record figure, 5366.6 thousand people (since the start of the statistical series, February 1998). Employed people are growing faster, 2.8%YoY/+36bpMoM than Active Population, +2.10%YoY/+19bpMoM, so unemployed rate comes down. The same conclusion derives from the Under Utilization rate, reaching new lows, 9.39%. A possible explanation to the Active population lower growth rate, could be related with the new migration policy, so unless the economy slow down, the unemployment rate could reach new lows.       

Source: INE, AS Independent Research