New employment data from two sources underlines the advance of the Irish jobs market. Still separate data reflects constraints on consumers and banks.
One week after revised Central Statistics Office figures showed unemployment in April fell below 8 per cent for the first time since the crash, another set of the figures showed the jobless rate declined to 7.8 per cent in May from 7.9 per cent the previous month. In the year to May, the seasonally adjusted number of unemployed people dropped by 38,300 to 169,700.
To put this in context, the unemployment rate was 11.6 per cent two years ago and 9.6 per cent one year ago. Thus the latest data points to a 3.8 percentage point decline in two years, leading Government figures to point out that the jobless rate is now at a level not seen since the fateful autumn of 2008.
Further context comes by way of new Eurostat data, which shows that the seasonally adjusted unemployment rate in the euro zone was 10.2 per cent in April.
Severe toll
Ireland has some distance to travel before achieving a jobless rate akin to that of Germany (4.2 per cent), but the rates seen in Greece (24.2 per cent) and Spain (20.1 per cent) reflect a severe toll of the crisis that has to yet to be overcome.
Ireland is far from erasing the brutal legacies of the crash but employment data points to resilience in the domestic economy, even if voters did not buy into the upbeat recovery mantra of Fine Gael and Labour.
There are regional, age and gender disparities, for sure, and concerns that very many people see too little of the turnaround in daily life.
Despite the progress made in terms of job creation, unexpected job losses at Intel and industrial strife at the Luas and Tesco are emblematic of trading and wage pressures within the wider employment market.
A new consumer survey from KBC Bank Ireland and the Economic and Social Research Institute suggests that sentiment weakened in May, the third decline in four months.
Likely trajectory
Such results “seem to reflect a reassessment” of the likely economic trajectory and its impact on household finances, said Austin Hughes, chief economist at KBC.
“The most notable area of weakness in the May survey was in relation to the outlook for jobs, even though unemployment continued to fall and there were plenty of new job announcements during the survey period.”
High-profile disputes brought prominence to the question of pay, Mr Hughes added.
“Difficulties in this regard may have weighed on consumers’ assessments of the health of the Irish jobs market at present.”
Loans to households
Further questions are raised by data showing a 2.4 per cent annual decline in loans to households. “The bottom line is that credit will, in our view, need to flow at a much stronger level than currently if the Irish economy is to grow to potential over the long-run,” said economist Alan McQuaid at Merrion stockbrokers.
