News
Unemployment rise less than expected
Average unemployment of 8.9% in March represents a somewhat smaller than anticipated increase over the previous month. Although still below the average of 9.1% in the Eurozone during the same period, unemployment in Iceland is high in a longer-term national perspective, reaching a previous peak of 7.5% in the last major economic downturn in 1994. Unemployment was 8.2% in February this year, up from 6.6% in January and 1.9% last October. In March 2008 it was merely 1%.
Almost 20% of persons registered as unemployed at the end of March were, in fact, in part-time work and received benefits to compensate for their reduced work level, one of the actions taken by the government to mitigate the impact of unemployment. This percentage remains practically unchanged since February.
The Directorate of Labour expects little change in the unemployment rate in April, forecasting a rate of 8.8-9.3%, although it points out that high economic uncertainty makes any assessment difficult. Further contraction is anticipated in many sectors, especially and services, in coming months. On the other hand, unemployment in construction and the travel industry is likely to decline in the summer months.