According to the recent unemployment report of the Central Bureau of Statistics, the Israeli unemployment rate declined to 5.8% during April 2011- the lowest level in over two years.
Number of job vacancies fell by 0.5% during May 2011 and reached 65.1 thousand jobs. As a result, the percent of job vacancies reached in May 2.9%, the same rate as in April 2011. There is still a strong linear negative correlation of -0.72 between these two data series.
According to a rough estimate of the number of jobs needed to be created each month just to maintain the current unemployment rate is 4.4 thousand. This figure is based on the following numbers: the Israeli annual population growth rate is 1.8%; the labor participation rate (2010) is 53.5% (the civilian labor force participation rate is 57.4% (December 2010); the population in Israel within working age (15-65 for women and 15-67 for men) is 5,488.6 thousand people (December 2010). Based on these numbers, we can calculate the number of jobs to be created on a yearly scale according to 5,488.6*1.8%*53.5% = 52.8 thousand, or on a monthly scale an average 4,400 jobs.
The current number of job vacancies is in theory (with emphasis on theory) higher than the number of jobs needed to maintain the current unemployment rate; this is why we are seeing a steady decline in the Israeli unemployment rate.
Despite the ongoing drop in the unemployment rate, there was also a recent drop in the average monthly wage that reached 8,491 NIS on March 2011 – the lowest wage level since November 2010. If this decline in average wage will become a trend, it will put an asterisk on the economic improvement of the Israeli economy.
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