Labor underutilization remains near 30% in second quarter

Turkey's labor underutilization remained close to 30% in the second quarter of 2026, according to data released by the Turkish Statistical Institute (TurkStat). While the seasonally adjusted unemployment rate dropped slightly to 7.9%, reflecting a decrease of 0.3 percentage points from the prior quarter, the broader measure of labor underutilization, encompassing time-related underemployment, the potential labor force, and the unemployed, fell by 0.2 percentage points to 29%. This figure highlights persistent challenges within the country’s labor market despite modest improvements in traditional unemployment metrics. The labor force grew by 71,000 individuals in the second quarter, reaching 35.278 million people. However, the labor force participation rate dipped marginally by 0.1 percentage points to 52.7%. Men maintained a significantly higher participation rate than women, standing at 70.6% versus 35.3%. Employment numbers also saw an increase, rising by 155,000 to 32.479 million people. The seasonally adjusted employment rate climbed by 0.1 percentage points to 48%, with male employment rates at 65.8% and female employment rates at 31.6%. Unemployment disparities between genders persisted, with the overall unemployment rate at 7.9%. For men, the rate was 6.7%, whereas for women, it was notably higher at 10.3%. Among youth aged 15 to 24, the seasonally adjusted unemployment rate decreased by one percentage point to 13.9%. Still, gender gaps were evident here too, with male youth unemployment at 11% and female youth unemployment at 19.3%. Sectoral trends showed mixed results. Services continued to dominate employment, accounting for 59.8% of total employment, with an addition of 240,000 jobs in the sector. Construction added 25,000 jobs, and agriculture saw an increase of 10,000. In contrast, industrial employment declined by 121,000, indicating some strain within manufacturing and related industries. Industry made up 19.7% of total employment, followed by agriculture at 13.7% and construction at 6.8%. In terms of working conditions, the average weekly working time for those employed rose slightly to 42.3 hours, an increase of 0.1 hours from the previous quarter. Despite this, the combined rate of time-related underemployment and unemployment remained high at 19%, suggesting many workers are either not fully utilizing their available hours or are unemployed. Additionally, the combined rate of the potential labor force and unemployment was estimated at 2%, underscoring the complexity of measuring true labor market health beyond simple unemployment figures. The data reflects ongoing efforts to stabilize the labor market, yet the persistent gap in participation and employment rates between men and women indicates structural issues that remain unresolved. The decline in industrial employment raises questions about the sustainability of growth in key economic sectors. Meanwhile, the slight improvement in youth unemployment offers a glimmer of hope, though the disparity between male and female youth unemployment suggests further challenges ahead. The labor statistics provide a snapshot of Turkey’s evolving economic landscape, revealing both progress and lingering obstacles. With employment increasing in certain sectors and participation rates fluctuating, the labor market continues to show signs of adaptation amid broader economic shifts. The interplay between different demographic groups and industries underscores the need for targeted policies aimed at addressing disparities and fostering inclusive growth. The latest data will likely influence policy discussions and economic planning in the coming months, as officials seek to address the underlying factors contributing to labor underutilization. Continued monitoring of these indicators will be crucial in assessing whether current trends represent sustainable improvements or temporary fluctuations in the labor market.