The seasonally adjusted unemployment rate saw a jump in July to 4.9% as economists warn that the growing international trade uncertainty, as well as the new EU-US trade deal, could negatively impact future job creation.
This is the highest the unemployment rate has been since March 2022 and comes after the EU and US agreed a trade deal which will see EU exports hit with a 15% tariff. This is likely to further hurt Ireland’s export-led economy.
Data from the Central Statistics Office (CSO) shows that the unemployment rate increased from the 4.6% recorded throughout the months of April, May, and June. The rate in July last year stood at 4.5%.
The CSO said the total number of people unemployed during the month stood at 143,100 – compared with 134,500 in June. For men, the unemployment rate stood at 5% last month and 4.7% for women.
Youth unemployment – which includes people aged 15 to 24 – increased more significantly from 11.3% in June to 12.2% last month.
Chief economist at Grant Thornton Ireland, Andrew Webb, said the rise in the unemployment rate “is a warning light on the economic dashboard”.
“After three months of rate stability, this sharp increase, especially the spike in youth unemployment to 12.2%, suggests that business confidence may be softening.”
Mr Webb added that the growing risk of tariffs are making firms more cautious with this hesitation “now showing up in the jobs data”.
“Ireland’s labour market remains strong by historical standards, but policymakers should take this signal seriously. If ignored, today’s flicker could become a more persistent fault,” he said.
Senior economist at hiring platform Indeed, Jack Kennedy, said the unemployment rate for July is “still low”, but not as positive as previously indicated.
“While the situation is still somewhat uncertain, official estimates suggest that the new 15% tariff on EU exports into the US will slow the rate of growth in the Irish economy by about 1.5% over a five-year period, resulting in the creation of about 56,000 to 70,000 fewer jobs.”
“This is a significant number, but it should be noted that the estimate relates to an extended period of time.”
Indeed said that job postings on its Irish website have rebounded slightly but it is still down from the start of the year. Mr Kennedy said this “confirms a gradual and ongoing, but by no means worrying, cooling of the labour market”.
“Even though the level of Irish job postings has reduced, the unemployment rate has remained below 5% with employers still struggling to recruit staff in certain categories. This month marks the 42nd month in a row that the unemployment rate has been below 5%,” he said.
Indeed said that the share of job postings mentioning remote or hybrid terms on Indeed’s Irish website stands at a post-pandemic peak of 17.5%. This puts Ireland well ahead of other countries such as the UK, Germany, Canada, Australia, France, and the US.
