Iceland Unemployment Rate Falls to 4.5% in December

2026-01-21 11:36 By Larissa Caser 1 min. read

Iceland’s seasonally adjusted unemployment rate fell sharply to 4.5% in December 2025, down from 6.9% in November.

While unemployment typically declines in December due to seasonal factors, the rate remained above the 3.9% recorded in the same month a year earlier.

The number of unemployed persons declined by 5,900 over the month, bringing the total to 10,500.

Unemployment decreased across both genders.

The rate for men dropped to 4.5% from 6.1%, while female unemployment declined sharply to 4.4% from 7.7%.

The youth unemployment rate, which tracks job-seekers aged 14 to 26, also improved, falling to 10.8% from 13.5% in the previous month.

The employment rate increased to 76.9% from 75.6%, corresponding to an increase of 1,600, with 223,400 employed individuals.

Meanwhile, the labor force participation rate fell to 80.5% from 81.2%.

On a non-seasonally adjusted basis, the unemployment rate also showed strong improvement, decreasing to 4.2% in December from 6.5% in November.



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Iceland Unemployment Rate Falls to 4.5% in December
Iceland’s seasonally adjusted unemployment rate fell sharply to 4.5% in December 2025, down from 6.9% in November. While unemployment typically declines in December due to seasonal factors, the rate remained above the 3.9% recorded in the same month a year earlier. The number of unemployed persons declined by 5,900 over the month, bringing the total to 10,500. Unemployment decreased across both genders. The rate for men dropped to 4.5% from 6.1%, while female unemployment declined sharply to 4.4% from 7.7%. The youth unemployment rate, which tracks job-seekers aged 14 to 26, also improved, falling to 10.8% from 13.5% in the previous month. The employment rate increased to 76.9% from 75.6%, corresponding to an increase of 1,600, with 223,400 employed individuals. Meanwhile, the labor force participation rate fell to 80.5% from 81.2%. On a non-seasonally adjusted basis, the unemployment rate also showed strong improvement, decreasing to 4.2% in December from 6.5% in November.
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