The number of 16-74 years old individuals active in the labour market was estimated to be 209,500 (± 6,700) in May 2020, based on monthly measures from the Icelandic Labour Force Survey, equivalent to an activity rate of 80.9% (±2.6). Of active individuals, the number of employed individuals was estimated to be 188,800 (±5,300) and 20,800 (±3,800) unemployed and looking for a job. The rate of employed individuals of the population was estimated to be 72.9% (±2.8%) and the unadjusted employment rate was estimated to be 9.9% (±1.8).
Comparing the unadjusted measures from May 2020 to measures from the past two years shows an increase in the unemployment rate by 3.9 percentage points from May 2019 and 6.9 percentage points since May 2018. The number of unemployed individuals increased by 8,000 individuals from 2019 and by 14,600 from 2018. The employment rate is 4.2 percentage points lower than in May 2019 and 7.4 percentage points lower than in May 2018.
Similar unemployment rates not been seen since 2009-2011
An increase in the unemployment rate is commonly seen during spring in Iceland, especially in May. The main cause is an increase in demand from young people seeking employment when school ends. In May 2020, the ratio of 16-24 year olds out of the total number unemployed individuals was 40.4% and the unemployment rate 23.3%. The effects of Covid-19 are evident in May 2020 despite the general seasonal increase in unemployment rate. Similar unemployment rates have not been seen since 2009-2011, when the unemployment rate increased following the financial crisis in 2008. The unemployment rate in March, when the effects of the epidemic were first notable in Iceland, was 3.3% and the unemployment rate has increased by 6.6 percentage points since.
The seasonally adjusted results in May show the number of unemployed to be 14,300, which is equivalent to 5.9% of the labour force. Seasonally adjusted activity rate was 79.5% and the employment rate 72.8%. The seasonally adjusted activity rate increased by 4 percentage points from April 2020 and the employment rate by 2.6 percentage points. The seasonally adjusted average hours worked were 36.7 in May which is a 3.2 hour decrease from December 2019 and the lowest seasonally adjusted average hours worked in the history of the continuous Icelandic Labour Force survey since 2003.
The seasonally adjusted trend of the rate of unemployment for the last six months increased from 3.8% in December 2019 to 4.5% in May. Concurrently, the seasonally adjusted trend of employment rate decreased by 0.4 percentage points and the activity rate by 0.8 percentage points.
It is proper to note that the seasonally adjusted estimates may be somewhat inaccurate as a result of unprecedented circumstances in the labour market in the spring of 2020. The seasonally adjusted estimates correct for general seasonal changes in the labour market, such as the increase of unemployment for young people in springtime due to students looking for summer jobs. It is evident that in the spring of 2020 such adjustments are insufficient because of the present extraordinary labour market situation. Thus, it is important to focus on the unadjusted measures when estimating short term effects.
All numbers are weighted by age and gender and rounded to the nearest hundred.
|Table 1. Labour market in May — unadjusted measures|
|Total 16–74 years|
|Hours of work||39.7||1.1||40.7||1.0||37.5||1.2|
|Table 2. Labour market last 6 months — seasonal adjustment|
|Total 16–74 years|
|Hours of work||39.9||39.6||39.4||38.4||37.3||36.7|
|Table 3. Labour market last 6 months — seasonal adjustment trend|
|Total 16–74 years|
|Hours of work||40.1||40.0||39.8||39.5||37.5||37.3|
About the data
The Labour Force Survey for May 2020 covers 4 weeks, from May 4th through May 31st. The sample consisted of 1,530 individuals 16-74 years old, domiciled in Iceland. When those who were domiciled abroad or deceased had been excluded, the net sample consisted of 1,496 individuals. Usable answers were obtained from 960 individuals, which corresponds to 64.2% response rate.