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Israel's Unemployment Rate Plummets to 2.8% Amid Ongoing Military Reserve Service

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Discover how Israel's unemployment rate fell to 2.8% in July, driven by military reserve service amidst ongoing conflict. Explore the implications for the labor market and rising wages.

Declining Unemployment Rate Amid Ongoing Conflict

The unemployment rate in Israel has remarkably declined to 2.8% in July from 3.1% in June, according to the Central Bureau of Statistics. This significant drop is largely attributed to the ongoing reserve service in the Israeli army, as the conflict with Gaza continues into its 11th month. The data highlights a labor market dynamic that has not been seen in many years, with the current rate being one of the lowest recorded.

Reserve Service Impact on Labor Market

The increase in the number of Israelis serving as reserve forces has created a notable shortage of labor in the civilian sector. Many individuals are occupied with military duties, thus decreasing the available workforce for civilian jobs. This situation has paradoxically led to a rise in real wages, despite a general economic slowdown. The employment rate has also seen a slight uptick, rising from 61% to 61.2%, while the participation rate in the labor force remains stable at 63%.

Insights on Employment Trends

The statistics reveal that the percentage of employees absent from work due to reserve service was 9.4% in July, a significant decrease from the previous month’s 15.6%. For male employees, the rate of absence due to reserve duties was 22.1%, down from 28.5% in June. Overall, the unemployment rate, which includes those who have stopped seeking work, fell from 4.8% to 4.4%. These figures indicate a robust labor market, although approximately 1 in 10 employees remain engaged in reserve service.

  • The economic landscape in Israel is being shaped by the ongoing military conflict, which has led to a unique labor market scenario. While the unemployment figures are encouraging, they reflect a complex reality where many citizens are engaged in military service, limiting their availability for civilian employment. The rising wages amid a labor shortage suggest that businesses are competing for a smaller pool of available workers, which could have long-term implications for the economy.
Clam Reports
Refs: | Aljazeera |

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