Weak retail and construction sectors blamed for increase in unemployment

Unemployment hit a new high of 18.7% in January, the worst of all the states joining the EU next year, adding weight to calls for rate cuts and deep labor reforms to stimulate job creation. The Central Statistical Office (GUS) figures showed on Friday that 104,000 people joined the dole queue last month, with a deep slowdown in the construction and retail sectors blamed for taking the jobless register up to 3.32 million. The figures poured cold water on hopes that a mild reform of the labor code would provide a quick fix to the problem. Economists warn the figures may remain high unless labor law is reformed further, combined with cuts in payroll costs and restructuring inefficient old industries that draining the public purse and hinder a growth revival. (Parkiet, Feb. 22-24, p. 8; Reuters) J.K.