State’s unemployment rate unexpectedly drops to 4.2% despite weaker economic conditions

The State’s unemployment rate unexpectedly fell in February defying a general softening of economic conditions internationally linked to higher interest rates.The seasonally adjusted jobless rate dropped to 4.2 per cent in February, down from 4.5 per cent in January but up from 4.1 per cent in February last year.The headline rate corresponded to 119,300 people, compared with 129,300 the previous month. There was an increase of 6,500 in the seasonally adjusted number of people unemployed in February when compared with a year earlier, the Central Statistics Office (CSO) said.The youth unemployment rate also fell to 10.5 per cent down from a revised rate of 11.7 per cent in January, the CSO said.The latest unemployment numbers come on the back of exchequer returns for February, published on Tuesday by the Department of Finance, which show Government tax receipts were up – on an annual basis – by 5.5 per cent at €12 billion in February.The strong performance was driven in the main by income tax, which was up by nearly 6 per cent year on year, reflecting buoyant conditions in the labour market with a record 2.71 million people employed.“Despite challenges such as geopolitical uncertainty and a global economic slowdown, the labour market remains robust. Low unemployment levels have driven strong consumer spending, supporting the domestic economy amid a slowdown in multinational exports,” Jack Kennedy from recruitment website Indeed said.“Consumer sentiment is improving amid a sense that cost-of-living pressures are easing somewhat, although many consumers are likely to need further evidence of better days ahead before this becomes more ingrained,” he said.“For employers in many sectors, recruiting staff is likely to remain difficult for now, especially at a time when wage growth has slowed, suggesting many are simply not in a position to offer would-be recruits higher salaries,” Mr Kennedy said, noting Irish job postings on Indeed remain 16 per cent above pre-pandemic levels at the end of February, albeit this is down from 23 per cent in January.

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