Irish unemployment rate falls to 16.7%, signs of stagnation

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Ireland’s unemployment rate, including those receiving temporary COVID-19 jobless benefit, fell to 16.7% at the end of July from 23.1% in June, but jobs growth is stalling after the government paused further reopening of the economy.

The unemployment rate, which stood at 4.8% before the crisis, hit a record 28.8% in April after 600,000 people claimed emergency payments. That fell to 274,600 this week, reflecting the reopening of restaurants, hotels and some pubs on June 29.

However, the government delayed the fourth and final stage of its reopening plan for a second time on Tuesday, keeping nightclubs as well as pubs that do not serve food closed until at least the end of August after a doubling of COVID-19 cases.

The weekly fall of just 12,300 in Pandemic Unemployment Payment claimants was also the smallest since early June. Analysts at Davy Stockbrokers said the jobless rate could remain at double-digit levels in 2021.

“This is a worrying sign after the re-opening of the economy in June and July, with labour markets gains proving harder to find with the unemployment rate still stubbornly high,” Davy chief economist Conall MacCoille wrote in a note.

“Addressing residual unemployment may prove far more challenging – depending on how much activity in the retail/tourism sectors remains impaired into 2021.”

The unemployment rate rose to 5.0% in July from 4.6% in June, excluding the COVID-19 payments, the Central Statistics Office data showed.

The temporary payments, which were initially much larger than regular jobless benefits, were extended until April last month as part of a stimulus package.

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