Unemployment edges higher to 4.2% as growth cools but still points to full employment

Unemployment of around 4% remains at historically low levels and still suggests the economy is operating at full employment.  Picture: Leah Farrell

Irish unemployment may have reached its floor as hikes in interest rates by the European Central Bank weigh on economic growth, official figures suggest.

The figures from the CSO show unemployment edged slightly higher to 4.2% in September, following a period when the Irish economy grew rapidly and created thousands of new jobs. The unemployment rate means there were 115,700 people seeking jobs last month, up from 113,000 in August. 

Unemployment of around 4% remains at historically low levels and still suggests the economy is operating at full employment.  

However, anecdotal evidence suggests the rapid rise in interest rates since the ECB started its rate hiking campaign in July last year to tame soaring inflation will weigh on the Irish domestic economy.  

The CSO figures showed that youth unemployment, which spans the 15 to 24 age group, rose to 11.9% from 11.4%. Unemployment for all males in the labour force rose to 4.4%, and for females to 4%. 

The figures come after the Economic and Social Research Institute earlier this week forecast a slowdown in economic growth as the rapid expansion in exports of the many multinationals based here slows sharply.   

The ESRI forecast employment levels will continue to rise to 2.66 million in 2024, although the rate of growth in the numbers will be markedly slower than in recent years, and that unemployment will remain at around 4%.