UPDATE 2 - Turkey: Unemployment falls to 10.4 percent

UPDATES WITH QUOTES FROM ANALYST

ANKARA (AA) - Turkey's unemployment rate stood at 10.4 percent in December 2017, falling 2.3 percentage points on a yearly basis, the country's statistical authority said on Thursday.

According to the Turkish Statistical Institute (TurkStat), the number of unemployed people aged 15 and over was 3.291 million last December, a fall of 581,000, year-on-year.

"The number of unemployed persons aged 15-years-old and over decreased by 581,000 to 3.29 million persons in the period of December 2017 in Turkey compared with the same period of the previous year," it said in a statement.

In the same period, the non-agricultural unemployment rate was 12.3 percent, down 2.6 percentage points.

While the youth unemployment rate, covering ages 15-24, was 19.2 percent, down 4.8 percentage points, the unemployment rate for the 15-64 age group was also down 2.3 percentage points to 10.6 percent, it added.

The number of people employed rose by nearly 1.619 million in the same period, bringing the employment rate to 46.9 percent, up 1.8 percentage points on an annual basis, the statement said.

Breaking down employment by sector, 18.3 percent of people were employed in agriculture, 19.5 percent in industry, 7.3 percent in construction, and 55 percent in services.

TurkStat added that the labour force participation rate (LFPR) was 52.4 percent, up 0.8 percentage points over the same period in 2016.

LFPR for men was 71.7 percent, up 0.2 percentage points, and the rate for women was 33.5 percent, also up 1.3 percentage points compared with the same period of the previous year, it said.

The rate of unregistered employment came in at 33.3 percent, up 0.6 percentage points from the same month in 2016, TurkStat added.

Enver Erkan, an economist at Istanbul-based GCM, told Anadolu Agency that both the raw and adjusted data are in line with market forecasts, which had expected a "little" increase in the non-adjusted unemployment rate and a "continuing moderate" drop in the adjusted unemployment rate.

"The continuing decline of seasonally-adjusted unemployment rate is a good point. As we look at the details, we see a general steady employment increase. But, the higher labor force participation rate limits the decline of unemployment rate," Erkan said.

He added the situation will likely be seen in the near term future also.

"After the seasonal increase in the first month of 2018, we’ll see the unemployment rate at current levels."

He said the moderate decline would "probably" continue in the adjusted data.

But, he added, one could not consider 10.9 percent unemployment rate "as a success in a 7 percent GDP growth environment."

"If the employment increase could be sustained like that and above 5.5 percent GDP growth is achieved, more recovery for labor market could be expected in the longer term," he said.