The Israeli economy has reached a significant milestone:
Unemployment declined to an all-time low of 5.5 percent in the second quarter of 2011. This is half a percentage point lower than in the first quarter of this year and an entire percentage point lower than in the second quarter of last year.
Israel’s unemployment rate is currently one of the worlds lowest. Unemployment in the U.S. stands at more than 9% while in some European countries – particularly those deeply immersed in economic crisis – the unemployment rate within certain subgroups (particularly young people) stands at dozens of percentage points.
The numbers point to a robust and highly active economy. It must be noted, however, that it is too soon to measure how the summer’s social justice protests will affect statistics. There is a possibility that those protests, which began in July, may nudge unemployment levels up by slowing down business activity and encouraging consumers to hold off on their spending.
Despite Israel’s healthy unemployment levels, the rate of participation in the labor force is actually below average when compared to other OECD nations, due to the fact that large sectors of the Israeli population – namely Arab women and the ultra-Orthodox – tend not to work.
The percentage of Israelis aged 15 and higher who participate in the labor force is 57.5% (compared with 57.4% in the previous quarter), while the percentage of unemployed participants between the ages of 25-64 stands at only 4.6%. Those percentages translate to 3.2 million Israelis participating in the labor force. That includes 3.02 million employed people and 175,000 unemployed workers actively looking for jobs.
The Finance Ministry was very happy with the statistics. “The policy steps we have taken in the last two years continue to bring results,” said Finance Minister Yuval Steinitz in response to the numbers. “Our continued, historic trend of lowering unemployment is even more impressive in light of the fluctuations in world markets. The Israeli economy is marked by stability. We need to keep this trend going by staying responsible with our budget policy, just as we have up until this point.”
