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COUNTRY INSIGHTS

The labor market remains strong
ISRAEL · Report · 01 May 2023

1. Recent economic indicators point to fairly robust economic activity in recent months. 2. The labor market remains relatively tight, and job creation strong. 3. The MoF has increased weekly bond issuance due to concern that the fiscal deficit will exceed the target.

The labor market remains strong, and economic growth steady (in Q1)
ISRAEL · In Brief · 01 May 2023

The labor market remains fairly tight The unemployment rate remained stable at 3.9% in March (similar to Feb), as 25k new job were created while labor participation increased as well. The BoI preferred category (ages 25-64) actually witnessed a decline in unemployment to 3.2% in March from 3.5% i...

Labor market tightness eases
ISRAEL · Report · 24 Apr 2023

1. Job vacancies continue to decline, reflecting slowing growth and a looser labor market. 2. New home sales have declined sharply from historically high levels in 2022. 3. Israeli institutions are increasing their exposure to assets abroad, while limiting their FX exposure, at least for no...

Labor market tightness eases
ISRAEL · In Brief · 23 Apr 2023

Labor market tightness eases 24.4.23 Demand for workers declines Job vacancies in March declined to 131k from 135k in February and 152k one year ago (the highest level reached). The decline in job vacancies was witnessed not only in the high-tech sector, but in sales, construction, and clerical w...

Initial signs of inflation moderation
ISRAEL · Report · 17 Apr 2023

1. Although inflation in March surprised slightly on the downside, core inflation remained stable at 5.1% y/y. 2. The main threat to inflation going forward remains a weaker shekel, while other macro trends support slowing inflation. 3. The fiscal deficit in March increased sharply on lower...

Initial signs of inflation moderation
ISRAEL · In Brief · 16 Apr 2023

Inflation in March points to some initial inflation moderation Inflation in March was up 0.4% (below market expectations of 0.5%). Core inflation remained stable at 5.1% y/y, similar to the pace in January and February. Several categories moderated, such as housing rentals (from 6.8% y/y to 6.7%)...

Inflation surprises slightly on the downside
ISRAEL · In Brief · 14 Apr 2023

Signs of inflation moderation Inflation in March surprised slightly on the downside, up 0.4% m/m (consensus was 0.5%, as was mine) and moderated to 5.0% y/y from 5.2% in February. Core inflation (CPI excluding energy and fresh produce) remained stable at 5.1% y/y. Housing rental prices (OER) mode...

The Governor sends a stern warning
ISRAEL · In Brief · 03 Apr 2023

Rates up with a stern warning Today’s rate hike of 0.25% to 4.5% was widely expected due to broad and sticky inflation, growth in line with the long-term trend, and a tight labor market. The Bank of Israel Research Dept. macro forecast attracted much more attention. For the first time since Covid...

Markets will react to the rate decision bias
ISRAEL · Report · 03 Apr 2023

1. We expect a rate hike of 0.25% today due to sticky inflation, a generally resilient economy and a fairly tight labor market. 2. With the shekel retreating from its peak of 3.70/USD on the judicial overhaul postponement, a 0.5% hike appears less likely. 3. Markets will follow closely the ...

Markets will react to the rate decision bias
ISRAEL · In Brief · 02 Apr 2023

We currently expect a rate hike of 0.25% today (Monday) Inflation has remained sticky, surprising on the upside, and broad-based. Economic activity appears resilient (for now) and the labor market fairly tight. The BoI annual report noted that inflation being impacted by demand factors, and less ...

A lull in the storm
ISRAEL · In Brief · 27 Mar 2023

Netanyahu announced on March 26 that the legislation (second and third Parliamentary votes) geared towards changing the judicial system will be postponed until the summer Parliament session in order to try to reach a broadly acceptable compromise. The opposition generally supported this move (alt...

Growth is expected to decelerate
ISRAEL · Report · 27 Mar 2023

1. Last night’s firing of Defense Minister Gallant resulted in mass demonstrations. This morning the shekel is appreciating on expectations for a freeze on judicial legislation. 2. Co-incident indicators, such as the BoI Composite Index, point to fairly steady growth. 3. Nevertheless, growt...

Growth is expected to decelerate, political uncertainty elevates higher
ISRAEL · In Brief · 27 Mar 2023

Several indicators are pointing to slowing growth ahead In January, high-tech service exports declined by 3.4% compared to Q422. In December-February industrial exports contracted by 11% saar. Imports of raw materials declined by 22%, consumer goods by 4% and machinery and equipment by 16% (all s...

Legislation regarding the judicial changes will proceed next week
ISRAEL · In Brief · 23 Mar 2023

Netanyahu announced tonight (Thursday) that the legislation regarding the change in the judicial committee which appoints Supreme Court judges will proceed next week as planned. This proposal will enable the coalition to appoint the head of the Supreme Court and replace two judges (out of 15), wh...

Uemployment declines sharply
ISRAEL · In Brief · 20 Mar 2023 · 1 response

Unemployment declined in February to 3.9% from 4.3% in January (sa) with the employment ratio up to 61.4% from 61.2% (employed/working age population). The number of employed continued to increase  fairly rapidly in February. This positive labor print strengthens our conviction that the likelihoo...

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