Unemployment Increased to 4.8% in November but Labour Market Has Proven Resilient in 2023

The main unemployment rate was 4.8% in November on a seasonally adjusted basis, up from 4.7% in October and down from a level of 4.5% twelve months ago. The seasonally adjusted number of people unemployed was up by 12,600 in November when compared with a year earlier.

Jack Kennedy, senior economist at global job site Indeed, comments on the latest CSO data:

“The Irish labour market has proved resilient overall in 2023, although it has softened in recent months with unemployment rising modestly and vacancies gradually drifting down from peaks, while remaining far above pre-pandemic levels.

The rise in unemployment is not unexpected. Indeed’s latest data shows Irish job postings were 23.4% above pre-pandemic levels at the start of December. This is down from 25.5% at the end of October, 27% at the end of September and well below a recent high of 65% in February 2022.

We may see further gradual softening in labour demand in 2024 reflecting headwinds in the wider economy and the gradual normalisation of vacancies from post-pandemic peaks. Hiring should become somewhat easier for employers as a result, although this may not be the case in certain sectors which continue to hold up strongly such as healthcare.

In sectors such as tech and professional services, our data shows job postings have weakened substantially and employers may be inclined to dial back on flexibility and benefits. Doing so may be risky, however, as candidates continue to value both. Searches for remote work, for example, remain elevated and this can be a powerful attraction and retention tool for top talent, particularly among smaller businesses competing against larger firms with strong employer brands.

Indeed’s data also shows wage growth dropped from a 2023 peak of 5.4% in March to a low of 3.8% in July and August, but it has ticked up again in recent months to 4.1% in September and 4.4% in October. Hard-to-fill roles, such as in healthcare and technical operations have recorded particularly strong wage growth, which may support robust underlying inflation pressures in coming quarters.

The job categories experiencing the strongest wage growth are Physicians & Surgeons (14.1%), IT Operations & Helpdesk (13.5%), Architecture (7.7%), Marketing (7.4%) and Nursing (7.1%).

For employers in these sectors, it poses a balancing act, navigating increased labour costs while attempting to manage other running costs already affected by inflationary pressures. On the other hand, it empowers employees, providing them with increased leverage to negotiate for higher compensation.”