Israel’s labor market remains tight, may keep monetary easing on hold

ISRAEL - In Brief 29 Oct 2025 by Sani Ziv
Three key indicators released this week confirm that Israel’s labor market remains tight. The number of job vacancies rose slightly in September to 146.9 thousand, the highest level ever recorded, with most of the increase coming from trade and manufacturing sectors. The unemployment rate remained at an exceptionally low level of 3% and meanwhile, the CBS second quarterly survey showed that the ratio of job seekers to available positions remained low at 1.6, broadly unchanged from previous quarters. These figures point to an expansion in economic activity and continued demand for labor. However, from the Bank of Israel’s perspective, such data are problematic, as they could sustain wage and inflationary pressures. Combined with the ceasefire violations and the renewed security tensions, the Bank of Israel may delay its planned interest rate cut at the November 24 meeting. The graph shows the unemployment rate (green), the share of people who did not work due to war-related disruptions (yellow), and the share of reservists called to duty (orange line), from September 2024 to September 2025. The unemployment rate remained low and stable around 3%. In June 2025, a temporary increase was recorded in the share of workers absent due to war-related disruptions during Operation Gideon Chariots in Gaza. Employment levels quickly normalized in July, highlighting persistent labor shortages and a tight job market.Graph 1Labor market indicators – September 2025, (as a share of the labor force) Source: CBS (Central Bureau of Statistics), Labor Force Survey, September 2025

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