Broad unemployment rises due to war-related disruptions, including school closures and business shutdown

ISRAEL - In Brief 24 Mar 2026 by Sani Ziv
Early data point to the economic impact of the war in Israel.  Yesterday, the CBS published labor market data for February. According to the CBS, the February survey partly covers the first week of March, reflecting the initial impact of the war, including business closures and workers placed on unpaid leave. In February, the broad unemployment rate rose sharply to 7.8%, up from 4.2%.At the same time, the narrow unemployment rate declined from 3.1% to a low of 2.7% (seasonally adjusted). Labor-force participation edged down slightly to 62.5% (from 62.7%), likely reflecting the early impact of the war on labor market participation as well. The chart below presents monthly developments in the unemployment rate, the job vacancies rate, reserve duty participation, and the share of those absent from work due to war-related disruptions between September 2023 and February 2026. Unemployment fell to 2.7%, while the job vacancies rate gradually eased to 4.5%, but remained very high. Labor-market indicators, September 2023-February 2026 (%) Source: Israel Central Bureau of Statistics (CBS)

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