Czech Republic: Unemployment decreases as temperatures grow

Actual (Mar): 8.9%
Consensus: 9.1%
Previous (Feb): 9.2%

March has brought a bigger than expected decrease in the unemployment rate. We estimate that most of the improvement is thanks to seasonality as higher temperatures led to a faster start of seasonal work. Thus, hiring increased compared with the previous months, while layoffs were the lowest in the last several years. We can also see a slight improvement of the seasonally adjusted unemployment that had been worsening up to February. Another good news is that the number of vacancies continues to increase. In March, there were nearly 40 k vacancies or one per 13.2 unemployed people.

The outlook for the unemployment rate is good, it should decrease further in the next few months thanks to positive seasonality and may get to 8 pct. Eventually, the labor market may also be helped by a somewhat better economic performance as the last monthly data was promising.