Actual (May): 8.2 %
Consensus: 8.2 %
Previous (Apr): 8.6 %
The unemployment rate has further decreased, as expected. Seasonal factors are usually very favorable during spring as increasing activity in construction and agriculture lift employment. Moreover, the Czech economy, driven by industrial production, continues to expand. We can see the industrial sector hiring, too. The report from the labor market is not as good as last month, but still layoffs are relatively low, while hiring remains good and the number of vacancies is on the rise. In the 1H the unemployment rate has already dropped significantly and should get closer to the 8 pct mark before summer.
Despite the fall in unemployment the labor market does not boost household expenditures. The reason is growth of wages that remains slow. In the 1Q real wage increased by 0.4 pct y-o-y. The overall amount of wages increased by 2.2 pct, which is not much above the 1.7 pct growth of consumer prices. This implies that the growth of the domestic demand should remain quite slow and progressive.