Live Register figures up for December but emigration and lower level of redundancy point to peak in summer

The pace of unemployment increase has slowed sharply since July last year, according to the latest Live Register figures for December.

The monthly increase was 3,300 or 0.8%. The estimated unemployment rate nudged higher to 12.5% from 12.4%. This compares with a rate of 8.5% at end-2008 and 4.8% at end-2007. According to Davy Stockbrokers, the number of claimants has been levelling off for three reasons. “First, the pace of firing has moderated since Q2 2009. Second, emigration has accelerated, although this effect should not be exaggerated (the decline in net migration has been caused more by collapsing immigration). Third, many people left the Register because they didn't qualify,” said chief economist Rossa White.

Ulster Bank was cautiously upbeat about the new figures. “It is important to point out that the underlying trend continues to be one of an improvement in the Irish labour market situation. An adjustment on the labour supply side is ongoing, linked to a combination of outward migration and lower participation rates. Less-weak labour demand is also likely to be playing some role. While employment in the economy is most-likely still falling, signs from the Manufacturing and Services PMI surveys are that it is not falling at as face a pace as earlier in the year.”

Davy expects the number of claimants to rise very slowly in H1 before peaking in early summer at below 13.5%.