Israel’s unemployment rate fell to 6.5 percent in February, the Central Bureau of Statistics said.
Unemployment dropped from 6.6 percent the month before, the Jerusalem-based bureau said on its website today. Labor force participation fell to 62.2 percent from 62.6 percent. Both figures are seasonally adjusted.
Today’s figures are the first published under a new format that changes the labor force survey from quarterly to monthly, to comply with Organization for Economic Cooperation and Development standards, the bureau said. The new survey covers the entire labor force, including those in military service, and increases the number of locations sampled, it said. Israel joined the OECD in 2010.
The economy is forecast to expand 3.1 percent this year, the Bank of Israel said March 26, raising its forecast from 2.8 percent. It cited “positive indicators” including imports, services exports and business expectations. Growth was 4.7 percent in 2011.
The bureau reported fourth-quarter unemployment of 5.4 percent last month, based on its previous methodology. While the new survey shows unemployment at a higher level, the trend remains downward, as it was under the previous methodology, the bureau said.
The updated unemployment rate, which shows that the Israeli labor market is in worse shape than previously thought, may affect monetary policy decisions later this year, Chaim Natan, chief economist at Menora Mivtachim Investment House, said in a telephone interview.
“Most economists expect unemployment to rise this year,” Natan said. “Unemployment may reach 7 percent, and if growth doesn’t strengthen we can forget about an interest rate increase, and there is a greater chance that the monetary loosening will continue.”
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