Unemployment slightly up in May

In May, 3.7 million people aged 15 to 74 did not have paid work for a variety of reasons. Aside from the unemployed, 3.3 million people were not looking and/or immediately available for work recently; they are not counted towards the labour force. These people are not counted towards the labour force. This mainly concerns people who are retired or unable to work due to illness or disability. Their number has dropped by an average 23 thousand per month over the past three months, to the lowest level since June 2009.

Unemployment rate slightly higher in May

In order to enable comparison of cyclical developments in the labour market across countries, the unemployment indicator of the International Labour Organization (ILO) is used as a measure. According to this indicator, the unemployed are those who are not in paid work but have been looking recently and are immediately available. This figure refers to the population aged 15 to 74 years. Between February and July 2020, i.e. during the initial phase of the coronavirus crisis, the unemployment rate in the Netherlands rose from 4.0 to 5.5 percent. This was followed by almost continuous decline, to 3.2 percent of the labour force in April this year. It was the lowest rate in the series with monthly figures as of 2003. In May, unemployment increased slightly to 3.3 percent.

UWV: continuing decline in May

At the end of May, UWV issued 165 thousand current unemployment (WW) benefits, i.e. a decrease of more than 10 thousand (-5.8 percent) relative to April 2022. Year on year, i.e. relative to May 2021, the decrease amounted to nearly 85 thousand (-34.0 percent). For the fourth consecutive month, the number of terminated benefits exceeded the number of new benefits. In May 2022, 15.3 thousand new WW benefits were granted while 25.4 thousand benefits were terminated.

UWV: decline in all age groups

The number of WW benefits fell in all age groups: by 8.0 percent among young people under the age of 25, by 6.1 percent among 25 to 54-year-olds and by 5.5 percent among 55 to 64-year-olds. UWV also granted nearly 11 thousand benefits to over-65s. This age category saw the smallest decrease in the past month (-1.5 percent).

More people seeking work

The slight unemployment increase in May was mainly related to a higher inflow from the inactive labour force. Compared to previous months, more people in the inactive labour force started working or looking for work. As a result, both the number of employed and the number of unemployed increased. The unemployment rate still shows a downward trend when measured over a longer (three-month) period. Employment continued its growth of the past two years. For the past twelve months, employment has seen a particularly sharp rise among young people.

Unemployment decline over the past three months

The continuing unemployment decline over the past three months is related to underlying flows between the active, unemployed and inactive labour force. This is visualised in the diagram below.

In May, unemployment stood at 323 thousand in May against 336 thousand unemployed three months previously, in February. This represents a decline of 13 thousand (4 thousand per month on average). As shown in the above diagram, unemployment declines when unemployed people find a job or withdraw from the labour market. On the other hand, there is an inflow into unemployment of people in employment and from the inactive labour force.

In the period March-May, more unemployed found a job than employed people lost their job, reducing unemployment by 59 thousand on balance. The three-month decline was limited as more people started seeking work without immediate result (i.e. from inactive labour force to unemployed) than stopped seeking and/or became unavailable (from unemployed to inactive labour force). On balance, there was an inflow of 46 thousand unemployed from the inactive labour force.

Every month, CBS publishes figures on the Dutch labour force in accordance with international guidelines. The corresponding indicators, i.e. the employed and unemployed labour force, are used around the world to describe cyclical developments on the labour market. Monthly figures are essential in this respect. In addition, UWV issues its own monthly figures on unemployment benefits. Figures released by UWV are not comparable one-to-one with the labour force indicators.