Friday 21 July 2017

Jobless rate falls and sales gain

Fergal O’Brien and Colm Heatley

Unemployment fell for the first time in four months and retail sales rose as the economy showed signs of pulling out of a recession.

Jobless claims on a seasonally adjusted basis declined by 2,300 to 432,400 in February and the unemployment rate slipped to 12.6pc from 12.7pc, the Central Statistics Office said today.

Retail sales excluding cars rose 0.1pc in January, the first increase in four months.

The Government expects the economy to return to growth in the second half and the Taoiseach Brian Cowen said today that the situation is “stabilising.”

Consumer spending may be kept in check by further job cuts and interest-rate increases by lenders.

The increase in retail sales is “very modest” and suggests that “consumer spending trends have yet to bottom in the Irish economy,” Dermot O’Leary, chief economist at Goodbody Stockbrokers in Dublin, wrote in a note today.

The jobless-claims fall, which may be attributable to migration, suggests that Goodbody’s forecast of unemployment peaking at 14pc may be “too pessimistic,” O’Leary added.

Unemployment may rise further. Lloyds Banking Group is shutting its Irish retail unit and has announced plans to cut about 760 jobs.

Royal Bank of Scotland Group and Aer Lingus Group are also shedding workers.

From a year earlier, retail sales excluding cars fell 4.7pc in January, today’s report showed. Including cars, sales fell 17pc in the month and were down 4.8pc from a year earlier.

Bloomberg

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