According to Tea Vassiljeva, a lead analyst at Statistics Estonia, the decline in unemployment indicates an improvement in the economic situation. "At the same time, there is no sign of an increase in employment and the large share of people outside the labor force among the working-age population does not yet provide grounds for greater optimism," Vassiljeva said.

There were 691,600 employed people in the second quarter of this year, 5,700 fewer than a year earlier but 5,300 more than in the first quarter. The employment rate of 68.6 percent was slightly lower than a year earlier and just 0.6 percentage points higher than in the first quarter of this year.

"Thus, the increase in employment typically seen at the beginning of summer and reflected in second-quarter data in recent years was relatively modest this year," Vassiljeva said.

Compared with the same period last year, the number of employed people fell in agriculture, forestry and fishing and in the service sector, while employment remained stable in industry and construction.

"Looking specifically at the number of employees, we see year-on-year growth in industry and construction, as well as in the service sector," Vassiljeva added.

In Tallinn, the number of employed people fell by 5,800 year on year, more than the decline in Estonia as a whole.

"Harju County outside Tallinn and Southern Estonia stand out — these were the only regions where employment increased both year on year and quarter on quarter, while the number of employed people declined elsewhere," the lead analyst said.

The unemployment rate has fallen by 0.5 percentage points

According to survey data, there were 49,000 unemployed people in the second quarter, 10,200 fewer than a year earlier. At 6.6 percent, the unemployment rate was the lowest second-quarter figure since 2023.

"Compared with the first quarter of this year, there were also 3,200 fewer unemployed people and the unemployment rate was 0.5 percentage points lower. The survey data on unemployment therefore follows a similar downward trend to the figures for registered unemployment from the Unemployment Insurance Fund," the lead analyst explained.

Youth unemployment still a concern

The unemployment rate among young people ages 15 to 24 remained high in the second quarter of this year, at 22.4 percent, but was still below the very high 25.4 percent recorded in the second quarter of last year and slightly below the 22.8 percent recorded in the first quarter of this year.

"It is typical for young people's interest in working to increase in the second and third quarters, during the summer school break, with their labor force participation rising as well. The good news this year, however, is that young people not only looked for work but also found jobs," Vassiljeva said.

There were 3,300 more employed young people in the second quarter of this year than a year earlier, while the youth employment rate was 33.8 percent, up 1.5 percentage points from the second quarter of last year.

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