Turkey: Unemployment rate flat but set to rise

In the three months to February, we saw the total (seasonally-adjusted) number of employed people falling by 767K, with a decline of 495K in February alone. Agriculture stood out with the highest employment loss in this period, followed by services and industry while construction showed a relative strength with a negligible loss, as new jobs posted in December and January were almost offset by a decline in number of jobs for this sector in February.

However, the unemployment rate has mostly followed a downward path in recent months, recording a drop from 13.1% in November to 12.7% in January, and remaining flat in February. This performance, despite relatively large job losses, is attributable to the downtrend in the labour force participation rate, from 52.6% to 50.7% in this period vs the all-time high of 53.5% recorded in early 2019. This signals that people continue to leave the labour force, not a good sign regarding the perception of households.

The unadjusted unemployment rate came in at 13.6% in February vs 14.7% in the same month of 2019, while the unadjusted labour force participation rate was 49.9% (the first number under the 50% threshold since Mar-14) . This compares with 52.5% in the same month of last year. On an annual basis, the labour force contracted by 1.1 million vs a 0.6 million fall in the total number of employed.