Estonia’s unemployment rate falls to 6.6 percent in second quarter

Estonia’s unemployment rate fell to 6.6 percent in the second quarter, while the employment rate showed little improvement, Statistics Estonia data reported by ERR showed.

The employment rate was 68.6 percent and the labour force participation rate was 73.4 percent. Statistics Estonia leading analyst Tea Vassiljeva said the decline in unemployment pointed to an improving economic situation, but added that the employment figures and high share of inactive people among the working-age population offered little cause for optimism.

There were 691,600 employed people in the second quarter, 5,700 fewer than a year earlier but 5,300 more than in the first quarter. The employment rate was slightly lower than a year earlier and 0.6 percentage points higher than in the first quarter.

“The employment growth typical of the beginning of summer, which has been visible in second-quarter data in recent years, was rather modest this year,” Vassiljeva said.

Compared with the same period last year, employment declined in agriculture, forestry and fishing, as well as in services. The number of employed people in industry and construction remained stable. However, the number of employees increased year on year in industry, construction and services, Vassiljeva said.

Tallinn recorded a year-on-year decline of 5,800 employed people, exceeding the total decrease for Estonia as a whole. Harju County outside Tallinn and southern Estonia were the only regions where employment increased both year on year and from the previous quarter.

Unemployment rate falls by 0.5 percentage points

The labour force survey recorded 49,000 unemployed people in the second quarter, 10,200 fewer than a year earlier. The unemployment rate of 6.6 percent was the lowest second-quarter reading since 2023.

The number of unemployed people also fell by 3,200 from the first quarter, while the unemployment rate dropped by 0.5 percentage points. Vassiljeva said the survey data followed a similar downward trend to the number of people registered as unemployed.

Youth unemployment remains high

The unemployment rate among 15 to 24 year olds remained high at 22.4 percent. However, it was below the 25.4 percent recorded in the second quarter of last year and slightly below the 22.8 percent recorded in the first quarter of this year.

Young people’s interest in working typically rises in the second and third quarters during the summer school holiday, which also increases their participation in the labour force. This year, however, young people not only looked for work but also found it, Vassiljeva said.

The number of employed young people rose by 3,300 year on year in the second quarter. The youth employment rate was 33.8 percent, 1.5 percentage points higher than in the same period last year.