Macro View

(reading time: 2 mins)

Summing up – The job market remained stable in October, as the unemployment rate at 6.10% is close to low levels, even so, there are some signals the job market is losing momentum. So we expect a less performing job market in the coming quarters.  

The INE (Portuguese Statistic Institute) just released October’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 October was flat at 6.1% vs. 12MMA (12 month moving average): 6.0% and 3MMA 6.1%;

2 – The under-Utilization rate (takes in consideration the under-utilization population divided by a broad concept of Active population) increased 10bp MoM to  11.4% vs. 12MMA: 11.4% and 3MMA: 11.3%;

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) went down 2.3%YoY vs. 12MMA: -9.8% and 3MMA: -4.1% (sequentially: +108bp);

4 – The Inactive population went down 1.9%YoY vs. 12MMA: -3.9% and 3MMA: -2.4% (sequentially: +42bp);

5 – The Employed population went up 0.7%YoY vs. 12MMA +2.6% and 3MMA +1.0% (sequentially: -16bp).

Our comments: the labour market remained stable, as the unemployment rate at 6.1%, is close to low levels. Nevertheless, there are some small signals of weakness, namely the Under-utilization rate and the unemployment rate close to the moving averages or slightly above, the employed population also in line with the moving averages… So, we expect a less performing job market in the coming quarters, even that any change would be probably slow.

Source: INE, AS Independent Research