Austria's Unemployment Rate Creeps Up to 7.1% Amid Economic Weakness

Austria's labor market continues to show signs of strain, with the unemployment rate climbing to 7.1% by the end of May. The Austrian Public Employment Service (AMS) and the Ministry of Labour and Social Affairs reported that 378,000 people were registered as unemployed, including those in training programs. This figure represents a 0.8% increase compared to the same period last year.

The persistent rise in joblessness is linked to Austria's relatively weak economic performance, which is placing a burden on the labor market. An increasing number of Austrian companies are facing bankruptcy. The country has been grappling with unemployment since April 2023, and despite signs of economic recovery, analysts caution against excessive optimism.

Individuals who have been unemployed for over a year are particularly affected, with 102,788 such people registered in May, a significant increase of 13% or 11,837 individuals. This group largely consists of people over 50 years old. The number of unemployed individuals aged 50 and above rose by 3.4% in May compared to last year.

Minister of Labour and Social Affairs Korinna Schumann urged company leaders to "re-evaluate" their hiring practices for older workers, emphasizing the need for them to re-enter the workforce, especially during challenging economic times. Notably, while male unemployment has been on a downward trend since February, female unemployment continues to rise.

Petra Draxl, a member of the Austrian Employment Agency's Management Board, commented on the May data, noting a 2.2% decrease in male unemployment (195,743) compared to a 4.2% increase in female unemployment (182,535). This trend is partly attributed to sectors with a higher proportion of female employees, such as retail and healthcare, being disproportionately affected. Unemployment among those under 25 also decreased slightly by 1.1% year-on-year. Interestingly, the number of unemployed foreign nationals fell by 2.2%, while the number of unemployed Austrian citizens increased by 3.1%.