Unemployment and Cost of Living Are Both on the Rise in Israel

Israelis got some troubling news Monday. Unemployment rose by 8 percent in June and the cost of living took an unexpected 2 percent jump.

The jobless include 4,400 newly arrived immigrants. The demand for workers dropped 21 percent last month, Employers apparently prefer cheap Arab labor from the administered territories to Israelis, either veterans or newly arrived.

The increase in the consumer price index, announced Monday by the Central Bureau of Statistics, was the highest for the month of June in six years. Fully half was the result of a 4.4 percent rise in rents, home purchase costs and mortgage payments.

Economists had predicted a 1.2 to 1.3 percent rise in June which was, in fact, considered pessimistic.

The Central Bureau reported that the monthly living expenses of an average urban family of four now amount to $1,645, of which $370 goes for housing.

The last time the index increased so sharply in June was in 1985, when annual inflation was running at a 200 to 300 percent rate, and the cost of living jumped 14.9 percent.

Drastic economic measures reduced inflation to single digits, but it is climbing again. The rate for the first six months of 1991 was 9.5 percent.

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