March 24 (Bloomberg) -- Israel’s unemployment rate in January declined to its lowest level in more than two years as an expanding economy led to the creation of new jobs.
The rate fell to a preliminary 6.1 percent from 6.3 percent in December, the Jerusalem-based Central Bureau of Statistics said today on its website. The rate was 7.1 percent in January 2010.
“There is a continued improvement in the labor market,” Rafael Gozlan, chief economist at Leader Capital Markets Ltd. in Tel Aviv, said by telephone. “We are seeing very positive growth figures and this trickles down to the job market.”
Israel bounced back from the global recession faster than many developed economies, with growth accelerating to 7.7 percent in the last quarter of 2010, the fastest pace in four years. The economy may expand 4.3 percent this year, Harel Insurance Investments and Financial Services Ltd. said March 2.
The improvement in the unemployment market will further strengthen inflationary expectations, Gozlan said. Israeli consumer prices are expected to rise 3.1 percent in the next 12 months, according to the average of forecasters surveyed by the Bank of Israel, the central bank said March 22. That is above the upper limit of the government 1 percent to 3 percent inflation target.
Fifteen of 20 analysts in a Bloomberg survey expect the central bank to boost the benchmark interest rate by a quarter percentage point to 2.75 percent at its March 28 meeting. One expects an increase to 3 percent and four predict the rate will remain at 2.5 percent.
Israel’s index of leading economic indicators rose a preliminary 0.4 percent in February, led by exports of goods and services and manufacturing, the Bank of Israel reported on March 17. Israel’s trade deficit narrowed in February as industrial exports increased, the bureau said on March 10.
The economic recovery has pushed the benchmark TA-25 stock index up about 6 percent in the past 6 months, led by Avner Oil Exploration LP, a partner in gas fields off the country’s coast.
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