The Icelandic labour market in September 2025

Summary

The unemployment rate in September was 3,5%, up from 3,4% in August.

There were on average 7.348 unemployed people in September 2025.

Unemployment by gender:

The unemployment rate for men in September was 3,6%, up from 3,5% in August. The unemployment rate for women was 3,4% in September, up from 3,3% in August.

Unemployment among young adults:

There were 2.007 young adults, aged 18-29 years unemployed in September 2025, up from 1902 in August.

Long-term unemployment

There were 1.580 long-term unemployed (unemployed longer than 12 months) at the end of September 2025.

Forecast for October 2025:

It is expected that the unemployment rate will increase and be in the range of 3,6% to 3,7% in October. It is likely that the collapse of Play airlines will affect unemployment negatively in the coming months and that it will rise beyond previous forecasts in the last months of 2025.