Unemployment up in June

In June, 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. This mainly concerns people who are retired or unable to work due to illness or disability. Their number has dropped by an average 7 thousand per month over the past three months, to the lowest level since June 2009.

Unemployment rate higher in June

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. In April 2022, unemployment stood at 3.2 percent, the lowest rate in the series with monthly figures as of 2003. It subsequently rose slightly, to 3.4 percent in June.

More unemployment among young people

Unemployment among young people in the labour force stood at 6.9 percent in April, and rose to 7.5 percent in June. Among 25 to 44-year-olds in the labour force, the rate increased from 2.5 to 2.8 percent. Unemployment growth was relatively the lowest among 45 to 74-year-olds: from 2.3 to 2.4 percent.

Despite the (slight) increase over the past three months, nearly 300 thousand more people were employed in June this year than in June 2021. This also means that there are more newcomers in the workplace. In comparison with other EU countries, the number of new employees in the Netherlands was relatively high.

UWV: again fewer unemployment benefits in June

Between the end of May and the end of June 2022, the number of current unemployment (WW) benefits decreased further by 4 thousand to 160.7 thousand (-2.5 percent). One year previously, 238.3 thousand benefits were granted. This means that the number fell by nearly 78 thousand (-32.6 percent) over a 12-month period.

UWV: largest decline in accommodation and food services, construction, agriculture and culture

In accommodation and food services, the number of WW benefits in accommodation and food services continued to decrease relative to May (-12.1 percent). Construction (-11.8 percent) and agriculture (-9.0 percent) showed a substantial decline as well. Seasonal effects played a role here. The number of WW benefits was also down in the cultural sector (-7.1 percent) because many events that were cancelled in previous years due to COVID-19 took place this summer. The other sectors saw a drop in benefits as well, with the exception of the public sector, which had a slight increase (+0.8 percent).

The modest unemployment rise over the past three months is the result of underlying flows between the active, unemployed and inactive labour force. This is visualised in the diagram below.

The diagram shows that unemployment may increase not only because people in work lose their job, but also because people enter the labour force who were not previously part of it. As soon as they start seeking work and are available, they also become part of the unemployed.

The inflow from the inactive labour force is usually the most important reason for unemployment growth. This was also the case in the previous months, but from March through May the inflow from the employed labour force increased as well.

The balance of outflow and inflow from the unemployed to the employed labour force (-39 thousand) was lower in this period than earlier in the year. On the other hand, the balance of flows from the inactive labour force to unemployment (50 thousand) was higher between March and May than before. This resulted in 12 thousand more unemployed since March, an average of 4 thousand per month. As a result, unemployment grew from 327 thousand in March to 339 thousand in June.

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.