Israel just changed the way it gathers statistics to count the unemployed in order to bring the country's system closer with practices closer in line in the rest of the developed world. The first results of this new system? A shocking jump in the actual number of the unemployed.
Israel's Jobless Rate Soars – At Least On Paper
Shmarya Rosenberg • FailedMessiah.com
Israel just changed the way it gathers statistics to count the unemployed in order to bring the country's system closer in line with practices in the rest of the developed world. The first results of this new system? A shocking jump in the actual number of the unemployed.
Israeli government economists were quick to stress this new tally did not indicate an actual change in Israel's economy, but the result is jarring.
Under the old way of counting, Israel's unemployment rate was 5.4%.
Under the new system it is 6.8%.
Israel made about 40 changes in the way it surves its labor market, including adding soldiers – which Israel count as fully employed – to including 100 additional cities and towns in the counting. It also now conducts its survey monthly instead of quarterly.
The new results stunned Israeli economists.
"For the past few years, everyone was scratching their heads as to why wages were not going up and why there were no inflation pressures from the labor market because the previous unemployment rates showed Israel at full employment," economist Jonathan Katz told the Israeli business daily Globes. "Now ... there is some slack in the labor force," he said. "It now makes more sense -- but I don't know what they were measuring before."
Israel's jobless rate is still well below much of Europe's, where unemployment rates above 9% are the norm. The U.S. unemployment rate is 8.2%