The seasonally adjusted unemployment rate in September 2021 was 3.5% according to figures from the Icelandic Labour Force Survey. Seasonally adjusted activity rate was 79.5% and seasonally adjusted employment rate 75.6%. The seasonally adjusted unemployment rate has not been lower since in March 2020 when it measured 2.8%.
The seasonally adjusted unemployment rate decreased by 1.5 percentage points between months while seasonally adjusted employment rate increased by 0.4 percentage points. The seasonally adjusted trend of unemployment has decreased by 0.9 percentage points over the past six months and the trend of the employment rate increased by 2.4 percentage points.
Based on unadjusted measures, the number of 16-74 years old active on the labour market was estimated to be 207,900 (±6,800) in September 2021, which is equivalent to 78.2% (±2.6) activity rate. Of the labour force, 202,000 (±5,100) were employed and 5,900 (±2,100) unemployed and looking for a job. The employment rate was estimated to be 75.9% (±2.5) and the unemployment rate 2.8% (±1.0). Employed individuals worked 35.6 (±1.1) hours on average per week in September 2021. Comparison with September 2020 shows that the unemployment rate decreased by 1.6 percentage points between years and the employment rate increased by 2.2 percentage points.
It was estimated that 26,200 individuals had unmet need for employment (labour market slack) in September 2021, which is equivalent to 12.1% of the labour force and potential labour force. Of these individuals, 22.5% were unemployed, 28.4% willing to work but not looking, 7.5% in job search but not willing to work and 41.5% working part-time and wanting to work more. Compared with September 2020, labour market slack has decreased by 1.4 percentage points between years. The seasonally adjusted labour market slack has been stable over the past three months but has decreased by 0.4 percentage points over the past six months.
Please note that the sum of sub-items might be inconsistent with the overall results due to rounding.
About the data
The Icelandic Labour Force Survey for September 2021 covers five weeks, from 30 August to 3 October 2021. The sample consisted of 1,901 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 1,868 individuals. Usable answers were obtained from 1,228 individuals which corresponds to a 65.7% response rate.
The main definitions used in the IS-LFS are:
Unemployed: Individuals who were without work during the reference week i.e., did not work (for one hour or more) as an employee or self-employed, but are currently looking for work and can start work within two weeks or have found a job that to start within the next three 3 months. Individuals who are not in work but are studying are classified as unemployed if they meet the above criteria. Students, including those who seek a study contract in the field of industry, are therefore only considered unemployed if they have searched for work along their studies or future work in the past four weeks and are ready to start work within two weeks from the time the survey was conducted.
Unemployment: Unemployment is the proportion of those who are unemployed of the labour force.
Employed: Employed persons are classified as those respondents who worked one hour or more in the reference week or were temporarily absent from the work which they are usually hired to do.
Employment: Employment is the proportion of those who are employed of the population 16 to 74 years old.
Labour force: Labour force consists of employed and unemployed persons. Inactive are those who are considered as not belonging to the labour force. That is, people are considered to be inactive if they do not meet the conditions of being employed or unemployed.
Activity rate: Activity rate is the proportion of those who are unemployed and employed of the population of people aged 16 to 74.
Unmet need for employment: Unmet need for employment is the sum of 1) unemployed, 2) individuals working part-time who want to work more, 3) individuals who are ready to work but not looking for a job and 4) individuals who are not ready to work within two weeks but are looking for a job.
Labour market slack: Labour market slack is the proportion of those who have unmet need for employment of the labour force and potential labour force.