After a period of uncertainty, job growth in Finland has returned, with 45,000 more people employed in August than the previous year. However, unemployment has quietly crept up, indicating a significant increase. Despite a historically high number of job openings, this is not all good news, as persistent job vacancies also highlight labor market mismatches.
According to Statistics Finland, there were 2,662,000 employed individuals in August, which is 45,000 more than the previous year.
The employment rate for the 20–64 age group was 77.8%, and for the traditional 15–64 age group, it was 74.1%. The employment rate trend has remained relatively stable since last autumn, with a horizontal trajectory.
"We experienced quite a shock last month when employment dropped sharply in July. Now it seems that it was an isolated bad month rather than the start of a more significant employment downturn," said Jukka Appelqvist, Chief Economist at the Central Chamber of Commerce.
Currently, employment is primarily driven by women, with 49,000 more women employed in August than the previous year. In contrast, there were 4,000 fewer men employed in August compared to the previous year. Men tend to work in cyclical industries like construction, manufacturing, and logistics.
According to Statistics Finland, there were 192,000 unemployed individuals in August, which is 5,000 more than the previous year. The unemployment rate trend stood at 7.2%. The lowest point for the unemployment rate trend was in the spring of 2022 at 6.5%, so there has been a gradual increase of 0.7 percentage points. However, during the summer, the unemployment rate trend has remained relatively stable.
"The rise in unemployment has been gradual, almost unnoticed. But overall, we are already talking about a significant increase," noted Appelqvist.
In August, 64,700 new job openings were reported to employment offices, and there were a total of 114,400 job vacancies, which is 61,000 fewer than in August of the previous year.
"The cooling economy is most evident in the decline in the number of job openings. Historically speaking, the number of available jobs is still relatively high. However, persistent job vacancies may also signal labor market mismatches," Appelqvist added.
Unemployment Rises by 4.1% in Uusimaa (Southern Finland)
Unemployment in the Uusimaa region of Finland, which includes the capital city Helsinki, has seen a notable rise of 4.1% compared to the previous year. According to the latest data, there were a total of 85,760 unemployed job seekers in Uusimaa by the end of August, with 82,019 of them lacking a job and 3,741 on temporary layoffs. The number of job seekers without employment increased by 2,518 individuals (3.2%), while the number of those on temporary layoffs rose by 869 individuals (30.3%) compared to the previous year. Nationally, the number of job seekers without employment increased by 2.3%, and the number of those on temporary layoffs surged by 52.6% compared to the previous year.
The total number of unemployed individuals in Uusimaa grew by 4.1% compared to the previous year, with 3,387 more people unemployed than in August of the previous year. On a national scale, the annual change at the end of August was 4.3%. The proportion of unemployed job seekers in the labor force in Uusimaa stood at 9.6%, aligning with the national average of 9.4%.
Unemployment among job seekers under 25 years of age decreased slightly by 0.4% compared to the previous year, totaling 7,212 individuals in the region. However, those under 30 years of age saw a 2.6% increase in unemployment, with 16,135 individuals without jobs at the end of August. On a positive note, long-term unemployment in the region decreased by 2.5%, leaving 35,302 individuals in this category. Furthermore, the number of foreign-born unemployed individuals increased by 11.7%, reaching 19,957 people compared to the previous year.
In August, 19,676 new job openings were reported to the Uusimaa Employment Office, marking a 43.1% decrease compared to the previous year. Nationally, the annual change in job openings was -32.2%.
Unemployment Sees Significant Rise in August
Unemployment in Finland experienced a substantial increase of 1.2 percentage points in August, marking the most rapid rise in over two years. The surge was particularly pronounced among those aged 55 and older.
The YTK Unemployment Fund's member unemployment rate grew by 1.2 percentage points in August. In August, the unemployment rate for YTK members stood at 6.8%, compared to 5.6% in July. Such a swift rise was last observed in March 2021.
Unemployment increased in all regions of the country, with the sharpest increase seen in Central Ostrobothnia, where unemployment rose by 1.8 percentage points.
Unemployment among YTK members is now higher than it was a year ago, albeit by a small margin of 0.3 percentage points.
The age group most affected by the rapid rise in unemployment in August was those aged 55 and older, with a 2.3% increase in the 56–68-year-old category.
"Economic indicators are pointing downwards, and the pace of rising unemployment, especially among those aged 55 and older, was rapid last month. On the other hand, the long-term outlook is not quite as bleak, as unemployment has only increased by 0.3 percentage points compared to a year ago," said Auli Hänninen, CEO of the YTK Unemployment Fund.
Based on the number of applications received, September's unemployment appears to be at the same level as August. However, the overall picture will become clear only after the end of the month.
The unemployment rate among those with only a basic education increased most rapidly, reaching 12% in August. In contrast, those with a vocational school degree had an unemployment rate of 7.9%, high school graduates 7.3%, university degree holders 6.9%, and those with an applied sciences degree 5.2%.
"Education has long been known to reduce unemployment. Individuals with only a basic education are in a vulnerable position in the job market, which becomes apparent whenever unemployment starts to rise. For university graduates, the statistics are somewhat affected by the annual summer unemployment in the education sector, which does not have the same impact on those with applied sciences degrees," explained Auli Hänninen.
The YTK Unemployment Fund has over 520,000 members, representing approximately one-fourth of Finland's wage earners, making it the country's largest provider of earnings-related security.