Turkey: Unemployment rises slightly in June

ANKARA

The unemployment rate in Turkey rose slightly in June, official figures showed on Tuesday.

The jobless rate increased to 9.6 percent in June from 9.3 percent previous month, Turkish Statistical Institute, or TurkStat, reported.

There was a 0.5 percent point rise in unemployment over the year to June with 2.88 million out of work ,an increase of 226,000.

But the rate of labor force participation also increased to 52.1 percent, with 30.14 million people in work, up 901,000 from June 2014 and up from 29.86 million people in work in May of the year.

"We prefer focusing on the change in employment rather than the unemployment statistics. Unlike the U.S., in Turkey workforce participation is increasing. Therefore unemployment numbers are volatile. We can see the unemployment rate rise and fall, while employment is on a steady rise," Bora Tamer Yilmaz from Ziraat Securities in Istanbul.

"We calculate that Turkey needs to add 0,27 percent [employment] on a monthly basis more jobs to the economy. In June the monthly increase of 0,34 percetnt [employment] is above the trend and matches the strong GDP data of the second quarter." he added.

The proportion of women in work rose to 32.3 percent, a 1.4 percentage point increase over the year to June. The rate for men increased by 0.1 percentage point to 72.4 percent.

"New data suggests that unemployment is set to float between 9-11 percent band. And it is not expected to affect Turkish markets either positively or negatively unless it reaches out of this band." Zeynel Balci, a strategist with Meksa Investment house said.

"Turkish markets are almost deaf to this kind of indicators as they are pricing the eventual Federal Reserve rate hike and political uncertainty within the country," Balci said.

The employment rate rose slightly over the year to 47.1 percent in June from 46.9 percent in May, TurkStat reported.

Service industry employment rose slightly, 0,8 percentage points, while jobs in agriculture and construction fell.

In its latest World Economic Outlook report, the International Monetary Fund predicted that Turkey’s unemployment rate would rise to 11.4 percent this year.