Snap29 August 2018Updated 4 months ago

Hungary: Minor improvement in the labour market

The unemployment rate remained broadly unchanged in July, another sign that the pace of improvement in the labour market is slowing


Unemployment rate

Consensus (3.6%) / Previous (3.6%)

As expected

The unemployment rate of the 15–64 age group came in at 3.6% in July 2018, posting a 0.6 percentage point drop compared to the same period last year. Although we haven't witnessed a significant improvement from June, we remain optimistic about the condition of the labour market. The number of employed people hit another record, according to the statistics office, rising by 0.93% year on year (41k) to 4.426 million. In addition, the group of economically inactive people decreased further to 1.784 million.

The structure of improvement shows a favourable picture, as the number of employed people in the primary labour market increased by 92,000 year-on-year, while the number of fostered workers and those working abroad fell by 42,000 YoY. The inactive layer of workers is still finding continuous wage increases attractive, although a slowdown in the pace of improvement is clearly visible.

Labour market trends


The bottom line

The slowing pace of improvement suggests that a significant change in the unemployment rate is not likely in the current circumstances. We also see the labour supply as a barrier. Regarding 2018, we forecast a 3.5% average unemployment rate.