Israel's unemployment rate falls to all-time low

Israel's unemployment rate fell to 5% of the civilian labor force in October 2011, an all-time low, the Central Bureau of Statistics reported today.

There has been a steady monthly decline of 0.1-0.2% in the unemployment rate since January, falling from 6.2% in January to 5.6% in May and 5% in October 2011.

The figures are surprising, given that economic activity is declining, including by labor-intensive export-oriented manufacturing. However, the unemployment rate is the economic indicator with the longest time-lag in its response to changes in activity.

Shekel strengthens after interest rate decision

The Bank of Israel left the interest rate unchanged at 2.75% against analysts' expectations of a fall of 25 basis points. In addition, it cut its 2012 growth forecast to 2.8% from 3.2%, due to unstable global economic conditions resulting from the European debt crisis.