(MENAFN) The Israeli Bureau of Statistics reported on Monday a notable increase in the country's unemployment rate, reaching approximately 10 percent in October. This surge is attributed to the conflict with the Palestinian Hamas movement, which led to the displacement of tens of thousands of citizens residing near the Gaza envelope.
While the headline unemployment rate remained stable at 3.4 percent last month, considering the anticipated temporary job losses, the rate rose to 9.6 percent in October. This translated to 428,400 people unemployed, a significant jump from the 163,600 reported in September, just before the October 7 attack when Hamas militants overran Israeli border towns.
The aftermath of the attack prompted the mobilization of nearly 400,000 Israelis to reserve duty. Official data indicates that around 80,000 Israelis have been placed on unpaid leave in the weeks following the conflict. Consequently, the employment rate in October experienced a decline from 61.1 percent to 56.5 percent.
The Israeli Census Bureau acknowledged the need to make adjustments to the labor force survey conducted last month due to the war's impact. Interviews were nearly nonexistent in the week following the attack, and subsequent interviews were conducted by telephone rather than in person. Additionally, communities within 7 kilometers (4.3 miles) of the Gaza Strip were not surveyed, resulting in a decreased response rate from 66.9 percent in September to 55.3 percent.
While Israel has historically maintained a low unemployment rate, this recent spike poses economic challenges. With many individuals on furlough or losing their jobs, expectations point towards a contraction in the Israeli economy in the fourth quarter, potentially impacting the growth forecast for 2023, which is now expected to be around 2.3 percent. The International Monetary Fund's latest report had initially projected a growth rate of about 3.1 percent for the Israeli economy in 2023.
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