The employment rate last year was similar to the level of 2006
Economist at Eesti Pank
Data from Statistics Estonia show that the number of employed rose in the last quarter of 2012 by 1.7%, though in seasonally adjusted terms, the employment rate was below the rate for the third quarter.
Almost all of the increase over the year came from the service sector, with manufacturing making a negative contribution to annual growth. However, the seasonally adjusted quarterly growth figures show that manufacturing companies did hire new employees in the last half year. Labour productivity increased for a second consecutive quarter according to Eesti Pank estimates.
The unemployment rate has fallen rapidly in recent years and has descended to 9.3%, which is lower than the average for the European Union. At the same time, employment rate has climbed to around the level of 2006, when unemployment was 6%. This is because labour force participation is high, and it has not fallen even though the number of long-term unemployed is large.
Eesti Pank forecasts that employment will continue to grow and unemployment to fall in the coming years, though at a slower speed than last year. The central bank expects unemployment to fall to 9% by the end of 2013.
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