Unemployment rate reaches historic high in Turkey

Hurriyet Daily News with wires

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The rate rose from 10.6 percent in the same period of last year, according to the Turkish Statistical Institute’s household labor force survey for the period of December 2008, which covers November and December of 2008 as well as January of 2009. The jobless rate was 12.3 percent in the month-earlier period, according to Bloomberg.

While the number of unemployed increase by 838,000 people compared to the same period last year, it has reached a total of 3.274 million. Unemployment increased 3.2 percentage points in urban areas to reach 15.4 percent. Meanwhile, in rural areas jobless rate reached 10.7 percent, with an increase of 2.6 percentage points. Non-agricultural unemployment rate stood at 17.3 percent during the December period, with an increase of 4.3 percentage points compared to the same period a year earlier. Unemployment among men rose 4.2 percentage points to reach 16.3 percent, while jobless rate among women increased 4.1 percentage points to reach 20.9 percent.

Turkey’s economy grew 0.5 percent in the third quarter, the slowest in six years. The global crisis has slashed European demand for Turkish-made goods such as cars, leading automotive output to plunge an annual 62 percent in December. The slowdown limits the economy’s ability to absorb the youth who join the workforce every year.

Turkish firms, including carmakers and textiles producers, slashed jobs in thousands and suspended production as exports plunged and consumers were reluctant to part with their cash.

Economists said the jobless data showed people migrating from the cities back to villages due to the lack of jobs and higher cost of living in the cities.

"We expect the economy to shrink 5 percent this year and this will lead to further deterioration in the labor market outlook," Fortis Bank analyst Erkin Işık told Reuters.

Turkey added 91,000 jobs in services, construction and manufacturing in the period from the year earlier, while agricultural jobs rose 202,000, the statistics agency said yesterday. The workforce grew by about 1.1 million from the same period a year earlier, it said.

The young were hit especially hard with joblessness rates. The jobless rate among people aged between 15 and 24 was 25.7 percent, it said.

"The Central Bank is expected to cut rates and I do not think the data has created new expectations on this front," said TEB trader Levent Güven.

About 20.7 million people were employed in the period, compared with 20.4 million a year earlier, the agency added. The workforce participation rate, a measure of how many people of working age are working or seeking employment, rose to 47.7 percent from 46.2 percent a year earlier, the statistics agency said.

Turkish consumer confidence rose in February as inflation slowed and the cost of borrowing fell. The gauge of confidence rose to 74.01 from 71.56 the previous month, according to a separate report by the Turkish Statistical Institute, or TÜİK. That was an increase of 3.42 percent.

The increase in consumer confidence stemmed from the improvements in consumers' assessments concerning purchasing power in the present and next period, said the institute.