Actual (Dec): 8.6 %
Consensus: 8.5 %
Previous (Nov): 8.0 %
The unemployment rate increased slightly more than expected in December. There is a small increase in the seasonally-adjusted figure, while most of the rise is seasonal. Layoffs surged and hiring was low in December, which is typical for the end of the year when most of the personnel changes take place. The flows were weaker compared with the previous year. Number of seasonal workers decreases in winter as activity in construction sector is subdued. However, December 2011 was not very cold and the negative effect can, therefore, intensify in next months if temperatures go lower.
Although the seasonal drop in employment will reverse after winter, the unemployment rate will likely remain higher than before. The negative trends on the labor market, that we have been observing in the last several months, persist. As the economy is stagnating, creation of new jobs is low. The evidence is in the number of vacancies, that has been shrinking since August, and also in the decreasing employment in the industrial sector. We expect the unemployment rate to go even higher at the beginning of 2012 when it will likely get above the 9 pct mark.