Employment boost sparks debate on price pressures

Employment boost sparks debate on price pressures

By Eamon Quinn

Official figures showing a reduction in unemployment across the State and in regions outside fast-growing Dublin has been hailed by analysts but has sparked a debate on whether price pressures are building.

The CSO said its Labour Market Survey showed that the number of people in employment had topped 2.23m in the three months to the end of December. It marks an increase of 66,800 people in employment in the year, while unemployment fell by 23,400 to 144,100.

The survey replaces the Quarterly National Household Survey.

Simon Barry, chief economist at Ulster Bank in the Republic, said: “Regional unemployment rate trends confirm that labour markets within and outside the [greater Dublin area] continue to show improvement, though there is considerable variation across the country; the mid-east and south-west are leading the way with jobless rates below 6% on average in 2017, while the midlands and south-east are lagging with rates of over 8%.”

He said: “As we have noted previously, the short-term unemployment rate has already fallen back to pre-crisis levels — an important indication of much-reduced slack in the domestic economy and associated upside risks to underlying trends in domestic costs and prices as we look ahead.”

Dermot O’Leary, chief economist at Goodbody, said that construction, which had grown employment by 10% in the year, “will continue to be a significant contributor to employment growth”, but was still well below its pre-crisis peak.

Davy economists said: “With the population much larger than a decade ago and immigration flows accelerating, the labour market recovery is far from complete.”

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