The unemployment rate in August 2021 was 5.1% according to seasonally adjusted figures from the Icelandic Labour Force Survey. Seasonally adjusted activity rate was 79.5% and seasonally adjusted employment rate 75.0%. Comparison with July 2021 shows that the seasonally adjusted unemployment rate remained the same while the seasonally adjusted employment rate increased by 0.2 percentage points between months. The trend of unemployment has decreased by 1.0 percentage points over the last six months and trend of the employment rate increased by 2.1 percentage points.
Based on unadjusted measures, the number of 16-74 year olds active on the labour market was estimated to be 211,600 (±7,100) in August 2021, which is equivalent to 79.8% (±2.7) activity rate. Of the labour force, 200,800 (±5,600) were employed and 10,900 (±3,100) unemployed and looking for a job. The employment rate was estimated to be 75.8% (±2.8) and the unemployment rate 5.2% (±1.5). Employed individuals worked 35.2 (±1.3) hours on average per week in August 2021. Comparison with August 2020 shows that the employment rate increased by 1.4 percentage points between years while the unemployment rate decreased by 1.4 percentage points.
Of individuals aged 16-24 years, it’s estimated that 800 were unemployed in August 2021 which corresponds to a 2.5% unemployment rate. The employment rate of 16-24 year olds was 76.7% and the activity rate 78.2%. Comparison with August 2020 shows that the employment rate increased by 8.1 percentage points between years while the unemployment rate decreased by 7.2 percentage points. The unemployment rate of 16-24 year olds has never been measured lower in August than in August this year from the beginning of the continuous Labour Force Survey of Statistics Iceland.
In August 2021, it is estimated that 27,200 individuals had an unmet need for employment (labour market slack) which is equivalent to 12.2% of the labour force and potential labour force. Of those, 39.8% were unemployed, 34.2% ready to work but not looking, 6.4% looking for a job but not ready to work and 19.6% underemployed (working part time and wanting to work more). Comparison with August 2020 shows that the labour market slack has decreased by 1.5 percentage points between years. The trend of the labour market slack has decreased by 0.3 percentage points over the last three months and by 0.9 percentage points over the last six months.
Please note that the sum of sub-items might be inconsistent with the overall results due to rounding.
About the data
The Icelandic Labour Force Survey for August 2021 covers four weeks, from 2-29 August 2021. The sample consisted of 1,527 individuals, 16-74 years old and domiciled in Iceland. When those who were domiciled abroad or deceased had been excluded, the net sample consisted of 1,495 individuals. Usable answers were obtained from 946 individuals which corresponds to a 63.3% response rate.
The main definitions used in the IS-LFS are:
Unemployed: Individuals who were unemployed in the reference week of the study, i.e., had neither employment nor been employed (for one hour or more) as an employee or self-employed, are looking for work and can start work within two weeks or have received a job that begins within 3 months. Individuals who are not in work but are studying are classified as unemployed if they meet the above criteria. Students, including those who seek a study contract in the field of industry, are therefore only considered unemployed if they have searched for work along their studies or future work in the past four weeks and are ready to start work within two weeks from the time the survey was conducted.
Unemployment: Unemployment is the proportion of those who are unemployed of the labour force.
Employed persons: Employed persons are classified as those respondents who worked one hour or more in the reference week or were temporarily absent from the work which they are usually hired to do. Employment is the proportion of those who are employed of the population 16 to 74 years old.
Labour force: Labour force consists of employed and unemployed persons. Inactive are those who are considered as not belonging to the labour force. That is, people are considered to be inactive if they do not meet the conditions of being employed or unemployed.
Activity rate: Activity rate is the proportion of those who are unemployed and employed of the population of people aged 16 to 74.
Unmet need for employment: Unmet need for employment is the sum of 1) unemployed, 2) individuals working part-time who want to work more, 3) individuals who are ready to work but not looking for a job and 4) individuals who are not ready to work within two weeks but are looking for a job.
Labour market slack: Labour market slack is the proportion of those who have unmet need for employment of the labour force and potential labour force.