Unemployment rises to 8.7 percent in June

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The Czech unemployment rate in June rose to 8.7 percent after it stagnated in May after a series of declines in the previous four months down to 8.6 percent.

The Czech unemployment rate in June, graph: CTK
The Czech unemployment rate in June rose to 8.7 percent after it stagnated in May after a series of declines in the previous four months down to 8.6 percent.

On average, there were more than 9 job seekers per vacancy in June, with the highest rate in some north Bohemian and north Moravian districts. For example, in Karvina there were more than 50 job seekers per one vacancy.

The lowest unemployment rate in June was in Prague and surrounding districts and in south-Bohemian district of Pelhrimov - around three percent.

An unemployment rate higher than 12 percent was recorded in 13 districts. The absolutely highest unemployment rate remains in the districts of Most, North Bohemia - over 21 percent.

Analysts attribute the June rise in unemployment mainly to the strong Czech currency and the first wave of fresh school graduates who registered at employment offices. The number of school leavers seeking jobs starts to increase in July but culminates in September when those who failed university entrance tests arrive in employment offices. Experts predict that the unemployment rate in July could exceed 9 percent. The strengthening of the currency also worsens the situation as it forces companies to reduce costs. An easy way of doing so is lay-offs.

Analysts expect that at the end of this year, unemployment will grow to 9.3 percent. A higher economic growth could slow down the growth only marginally. A reduction of unemployment below 8 percent would require structural changes, especially an increase in the mobility of workforce. Analysts are rather sceptical about the labour market chapter of the government manifesto which creates the impression that the policies of the new government dominated by the Social Democrats will further aggravate the situation by putting obstacles to staff reductions and by implementing affirmative action.