Israel’s Jobless Rate at Record Low

Israel’s unemployment rate hit a record low of 5.7 percent in May, in contrast to the United States, which is struggling with the worst jobless rate since the Great Depression in the early 1930s.
The rate in the United States is 9 percent but actually is considered to be as much as twice as high, due to so many people simply having given up looking for work and not being included in the list of those looking for jobs.

In Israel, the unemployment rate has been falling since the beginning of the year, leaving only 183,000 people unemployed, according to the Central Bureau of Statistics. The previous low point was an unemployment rate of 5.9% in May-August 2008.

The Bank of Israel recently commented that the economy was nearing full employment, meaning that most of the civilian labor force that wants to work is working.

Full employment, besides representing a strong economy, would increase employees' bargaining power for a rise in salaries, which in real terms have been relatively flat.

Forecasts for the economy are rosy, although inflation has surged to 4.1 percent the last 12 months, far beyond the maximum target of 3 percent.
Nevertheless, the Bank of Israel Monday night decided to leave the interest rate for August unchanged at 3.25 percent, based on forecast that inflation will return towards the target rate.

Economic indicators have shown that economic activity continues to expand, although more slowly than in the first quarter, mainly because of a decline in exports.

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