MBH Bank: Employment barely improved in May

The unemployment rate decreased by 0.1 percentage point to 4.3% in May 2025 and between March and May 2025. This figure was lower than our expectations and the market consensus. This is due to the fact that the number of unemployed people in May decreased by 5.2 thousand compared to the previous month, while the decrease was 1.5 thousand compared to the data a year earlier.

Employment figures barely improved in May. In addition to the modestly increasing employment level, the number of unemployed people decreased, and at the same time the number of economically active people (i.e. the potential workforce) also decreased in the month under review. In addition, the working-age population (15-74 years old) continued to decline, falling by another 5 thousand people in May and by 63.5 thousand in a year, which may also limit employment growth.

The following months may be determined by the fact that companies may postpone their investment decisions amid uncertainty related to tariffs, which may continue to mean declining labor demand. The decrease in the number of vacant positions and the mass layoffs in the iron and steel industry (which continued in June) project an unfavorable picture. For now, we maintain that the economy may start to recover towards the end of the year. At the same time, the improvement in employment may only follow this with a delay. Employment will first need to stabilize, and then its growth may be slow, as companies have not laid off workers en masse despite the weak economic situation, so recruitment is not expected to pick up very quickly when the recovery begins. We expect an average unemployment rate of 4.4% by 2025.