More Portuguese Left the Workforce as Lockdowns Hit the Economy

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Commuters wearing protective face masks ride a tram in Lisbon, Portugal.

Photographer: Jose Sarmento Matos/Bloomberg

Photographer: Jose Sarmento Matos/Bloomberg

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More people dropped out of Portugal‘s workforce in the three months through June amid the government’s confinement measures aimed at controlling the coronavirus outbreak.

The number of so-called inactive individuals rose 4.1% to 5.3 million from the previous quarter. That had the impact of pushing down the unemployment rate to 5.6% from 6.7% in the previous quarter, the Lisbon-based National Statistics Institute said on Wednesday.

The rise in dropouts “mainly explains the quarterly reduction observed in unemployment,” the institute said in a statement, adding that the trend could reverse.

Portugals economy shrank a record 14.1% in the second quarter from the first three months. In May, the government started easing some of the confinement measures that it introduced in March in a bid to jump-start the 10 million-strong nation. It forecasts gross domestic product will shrink 6.9% in 2020 and expand 4.3% in 2021.

The number of jobless workers from services businesses decreased 14.5% in the second quarter, while those from industries including manufacturing, construction and energy fell 21.2%.

• The number of people seeking their first job fell 36.9%

• Youth unemployment was at 19.9% in the second quarter

• Read more: Portuguese Economy Shrinks 14% as Virus Outbreak Halts Tourism