DUBLIN (Reuters) - Ireland’s unemployment rate has hit its highest level since the country’s financial crisis began, denting hopes aroused by stronger economic data that more jobs might be created.
After the number of people in employment rose by 11,000 on a seasonally-adjusted basis in the final three months of 2011, the first increase in four years, data released on Thursday showed a drop of 7,300 in the first three months of this year.
That meant the unemployment rate, which has stayed above 14 percent for 18 months, jumped to 14.8 percent from 14.5 percent in the previous three months, putting Ireland behind only Spain, Greece and Portugal with the highest rates in the euro zone.
“Some people had got overly excited about the rise in the fourth quarter. We always thought that was volatile and I think you might be seeing some of that in the first quarter data as well,” said Conall Mac Coille, chief economist at Davy Stockbrokers.
“Overall (though) the slowdown in the rate of employment contraction has continued. The rate at which employment is contracting continues to dissipate ... We are not falling off a cliff.”
Economists polled by Reuters last month forecast unemployment at 14.1 percent at the end of the year, falling to 13.5 percent by the end of 2013.
However in its updated economic outlook, the OECD predicted last month that the rate would only stabilise at 14.4 percent next year, higher than the 13.6 percent the government predicts for the halfway point of its term in office.
Thursday’s data showed net decreases in jobs in nine of the 14 sectors surveyed by the Central Statistics Office (CSO), with the largest rate of decline in the ‘professional, scientific and technical activities’ sector.
That will be particularly worrying for the government whose hopes of an export-led recovery hinge in part on hi-tech companies helping take the sting out of public spending cuts and tax hikes by creating jobs.
Economists also noted that a further fall in the labour force, particularly among people in the 20-24 and 25-34 age groups, suggested that emigration appeared to be accelerating.
Additional reporting by Conor Humphries; Editing by Ruth Pitchford