Economist: The employment rate improved in January, but the outlook is mixed | News

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Experts predict a labor shortage will hamper economic growth this year.

Employment in Finland continues to grow, with fixed-term contracts becoming increasingly popular. Image: Tiina Jutila/Yle

Finland’s employment rate has continued to grow this year, according to data from Statistics Finland. But experts say the country has yet to solve its long-term unemployment problem.

According to the digital computing agency’s labor force survey, the number of unemployed was 31,000 fewer in January 2022 compared to the same period last year, while the number of employed people was 88 000 more.

The employment rate trend was 73.5% and the unemployment rate trend was 7.0% in January.

The number of female employees increased by 60,000 and the number of male employees increased by 28,000 in the same month. The number of unemployed men stood at 109,000 and that of women at 97,000.

According to Juho Keskineneconomist at credit institution Hypo, the figures point to a strong and rapid recovery in the economy despite concerns about the impact of the Covid-19 crisis.

However, he said the high rate of long-term unemployment is a worrying sign.

“The outlook is twofold: the rise in fixed-term and part-time work explains the rise in employment, but also reflects the uncertainty faced by employers in the face of the protracted Covid-19 crisis,” he added. noted.

“Before the coronavirus hit, Finland had around 62,000 people unemployed for more than a year, now that number has reached 106,000. At the same time, there has been an exceptionally high increase in job vacancies. jobs, but unemployed job seekers are unwilling or unable to accept those jobs,” Keskinen said.

The economist said he believed this gap between supply and demand in the labor market would already limit Finland’s economic growth this year.

Employment rate trend above pre-Covid levels

Jukka AppelqvistChief Economist at the Finnish Chamber of Commerce, also attributed the high level of long-term unemployment to the skills and job mismatch, i.e. the inability to find the right person for the post.

“Long-term unemployment is declining at a snail’s pace, which is a stark indicator of the skills mismatch in the labor market,” he said in a review.

According to Appelqvist, the latest employment statistics have otherwise met expectations.

“Job growth slowed as expected in January, but the numbers cannot be considered particularly bad. The seemingly high growth rate is not a surprise, as employment improved throughout throughout the previous year and is currently significantly higher than a year ago.”

He noted that before Covid, the employment rate trend was no higher than 72.7%, but unemployment is still falling slowly.

“As expected, the coronavirus restrictions have created a strong headwind for job growth since the start of the year, and layoffs were on the rise. However, we cannot call this a disaster, but a rather small reversal compared to the number of layoffs in the early stages of the crisis. [spread of the coronavirus variant] Omicron appears to have caused a temporary slowdown in the labor market and employment continues to experience historic growth,” Appelqvist added.

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