The latest Irish Quarterly Household Survey, covering the final three months of 2015, revealed a surprising slowdown in the pace of employment growth; the increase was just 4,700 or just 0.2%. Moreover, male employment fell in the quarter, by some 4,000, and male unemployment actually rose. Total employment had grown rapidly in the first half of the year, by over 30,000, so the annual rise in the final quarter was still a healthy 44,000 (2.3%) but forecasts for employment growth in 2016 may be trimmed a little .
The labour force rose strongly in the quarter, by 9,000, and increased by 18,000 over the full year. The participation rate (the proportion of those over 15 in the labour force) is picking up again, albeit modestly. Net emigration slowed to under 14,000 in the year to April 2015 and appears to have fallen further in recent months, so supporting labour force growth.
As a result of this interaction between employment and the labour force the numbers unemployed in the final quarter fell only marginally, by 1.700 to 196,000. This was 26,000 lower than a year earlier, but again most of that decline was in the first half of 2015.
The unemployment rate also declined in q4, to 9.1% , but the fall was modest, from 9.2% in q3. The former was above the previously published monthly estimates , prompting a revision, with the result that the unemployment rate in January is now put at 8.9% instead of the original 8.6%.
The quarterly employment figures can be volatile and have shown unexpectedly soft readings before ( for example in early 2014) which have not proven the start of a trend. On that basis it would be premature to read too much in to this data, although it should be noted that Ireland is operating well above capacity, according to Department of Finance forecasts, and hence above ‘full ‘ employment , implying a large structural unemployment issue. That assumption may be wrong ,of course, but if true means that the unemployment rate may not fall as rapidly from here as the consensus predicts.