According to seasonally adjusted figures from the Icelandic Labour Force Survey, 13,100 individuals were unemployed in February 2021, or 6.4% of the labour force. The seasonally adjusted activity rate was 78.2% and seasonally adjusted employment rate 72.4%. Compared with January 2021 the seasonally adjusted activity rate increased by 1.5 percentage points between months and the seasonally adjusted unemployment rate decreased by 1.8 percentage points. Over the last 6 months, the trend of the activity rate has held stable in 77.7%, while the trend of the unemployment rate dropped by 0.3 percentage points and trend of the employment rate by 0.7 percentage points.
Based on unadjusted measures, the number of 16-74 year olds active on the labour market was estimated to be 200,600 (±6,900) in February 2021, which is equivalent to an acitivity rate of 76.4% (±2.6). Of active individuals, the number of employed persons was estimated to be 188,300 (±5,800) and 12,300 (±3,200) were estimated to be unemployed and looking for a job. The rate of employed individuals of the population was estimated to be 71.7% (±3.1) and the unemployment rate 6.1% (±1.6). Comparison with February 2020 shows that the unemployment rate is comparable between years, as the rate was 6.2% in February 2020. The unemployment rate increased by 0.7 percentage points and the activity rate by 0.6 percentage points between years.
Substantial labour market slack still present
Employed individuals were estimated to work 36.0 (±1.2) hours on average in February 2021, which is 2.8 hours less than in February 2020. It is important to keep in mind the changes made to the measurements of weekly working hours in the Icelandic Labour Force Survey in the beginning of 2021. Currently, planned mealbreak and absence due to personal errands are not counted as working hours. As a result, measured working hours are expected to decrease, but further analyses are anticipated in order to estimate the effects. Figure 3 presents a comparison of the two working time measures in the Labour Force Survey, where fairly stable seasonal trend can be seen.
Over the past two months a considerable decrease can be seen in the labour market slack although substantial slack is still present. The number of individuals which had unmet need for employment in February 2021 was around 29,000, which is equivalent to 13.8% of the labour force and potential labour force. Of those individuals, 42.4% were unemployed, 15.1% ready to work but not looking for a job, 18.0% looking but not ready to work and 24.5% employed but wanted to work more. Comparison with February 2020 shows a 1.2 percentage points decrease in labour market slack between years.
About the data
The Labour Force Survey for February 2021 covers four weeks, from 1 February through 28 February 2021. The sample consisted of 1,528 individuals, 16-74 years old and domiciled in Iceland. When those who were domiciled abroad or deceased had been excluded, the net sample consisted of 1,503 individuals. Usable answers were obtained from 974 individuals which corresponds to a 64.8% response rate.