The labor market remains tight in June

ISRAEL - In Brief 28 Jul 2026 by Sani Ziv
Although the unemployment rate increased to 2.9% in June from 2.8% in May, the labor market remains generally tight. For the main age group (25-64, closely followed by the BoI) unemployment remained stable at a low 2.7% with the labor participation rate stable at 80.9%. In June, total job openings (labor demand) increased sharply, while the total number of unemployed increased only modestly. Over the past two months, job vacancies increased by 15,000, compared with an increase of only 4,000 additional unemployed workers. As a result, the “labor market tightness index” rose to 1.17, meaning there are 1.17 job openings for every unemployed person. This remains historically elevated, compared with 1.11 in May and an average of 1.08 in 2025.Graph 1 The Ratio of Job Vacancies to Unemployed Source: Israel Central Bureau of Statistics (CBS) There is an expectation that the gradual release of reservists will increase the number of job seekers. However, labor demand appears to be growing at an even faster pace. Encouragingly, the number of employed reservists declined to 21,000 in June from 72,000 in March.Graph 2 The Number of Conscripted Employees (thousand)  Source: Israel Central Bureau of Statistics (CBS) Overall, the latest data indicate that labor demand continues to outpace the increase in job seekers. A tight labor market supports continued wage pressures and remains an upside risk to inflation. High-tech: The number of workers in the high-tech sectors increased slightly in June to 424.6k (SA) from 421k in May, but remains far from the peak in March 453.8k. The general downsizing of the high-tech labor force is due both to the strong shekel and increasing implementatio...

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