The rate covers 15-74 year olds. Fully 168,500 were jobless in May, down by 7,800 on the previous month and 20,900 fewer than in May 2021.

The rolling three-month average jobless rate stood at 3.4%, slipping from 3.5% in April and 4.1% twelve months earlier.

Analysts told MTI that the growing number of vacancies on the job market was forcing businesses to offer increasingly competitive wages, which further fuelled inflation.

Magyar Bankholding analyst András Horváth said Hungary was near full employment and the labour market had returned to pre-pandemic levels.

He said the war in Ukraine had not had any visible effect on domestic labour demand, adding that refugees could even help ease some of the labour shortages in the summer season. Horváth projected an annual average jobless rate of 3.1%.

Dániel Molnár, an analyst with the Századvég research institute, said employment had risen mainly on the back of the relaunch of the economy and rising domestic demand.

He said the number of Hungarian jobholders working abroad was on the rise but had yet to reach pre-pandemic levels. Molnár said employment could remain high over the coming months and the job market was more likely to face problems on the supply side.

ING Bank analyst Péter Virovácz said the latest data pointed to a strengthening labour market trend, adding that the number of unemployed was last this low in late 2019 and early 2020. He said that over the last several months the rise in employment had significantly outpaced the fall in unemployment.